Abstract
Many platform providers are involved in corporate venturing. Increasingly, platform providers stake out minority equity investments in complementors from their own platform ecosystem as an act of ecosystem governance, a practice that we refer to as platform venture capital (PVC). We study how other complementors respond to such investments, as it pertains to their decisions to introduce and withdraw complementary products. Building upon the triadic exchange structure and contingent adoption nature that are characteristic for platforms, we advance theoretical arguments that position PVC as a powerful proxy for customer demand in the platform ecosystem. We explore the implications of PVC for complementary product introduction and withdrawal by assessing the consequences of 24 PVC investments in the context of Salesforce’s platform ecosystem. Consistent with our theoretical arguments, we show that complementors tend to view PVC as a signal of opportunity rather than as a potential threat, such that they are more likely to introduce and less likely to withdraw complementary products in product categories affected by PVC. We also show that these effects are weaker for complementors with greater platform ecosystem experience and multihoming complementors that are better positioned to access information on the preference of platform customers.
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