Bio-entrepreneurs and their investors: a mutually beneficial relationship?

Abstract

We empirically study the influence of Venture Capital Companies (VCC) on the technology regarding biotechnology of startups and the commercialisation strategy by using a combination of dyadic case studies and a questionnaire survey. The main findings regarding the effects of and reasons for Venture Capital (VC) firms' influence on startups' commercialisation and technology strategy are the following. First, startups report that the VCCs' influence on their technology and commercialisation strategy can be either strong or weak, with very few startups reporting a medium level of influence. Second, VCCs' short-term objectives play an important role in VCCs' influence on their portfolio companies. Third, entrepreneurs' evaluation of the outcome of VCCs' influence on the company is dependent on the VCCs' reasons for exerting influence. Exerting influence because of 'the VCCs' greater plans for the startup' is rated as the most positive reason. Fourth, corporate VCCs' influence is rated more positive than other investor types' influence.