Abstract
In reality, some venture capital (VC) firms invest in competing start-ups simultaneously, and then an indirect tie between them is established. However, start-ups face the risk of knowledge leakage through the shared VCs. There is a research gap on what network defense the start-ups shall adopt to deal with this threat. To fill it, this paper put forward three methods: controlling partner addition, refusing “friends” and accepting “followers”. Then we discuss the impact of the round number on the possibility of these three defenses. Besides, we also make contributions to the literature on the indirect tie and network dynamics and provided implications about knowledge protection and VC partner addition. This study focused on US start-ups and tested our theory using 1985 ~ 2020 VC investment data from Thomson Reuter’s VentureXpert database.
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