Venture Strategy Research Articles

Venture adolescence

PurposeThe purpose of this paper is to investigate how early internationalization and the use of generic strategies by new ventures affect the performance and internationalization efforts of those ventures as they move beyond the period of initiation.Design/methodology/approachA total of 37 venture capital backed new ventures within the USA were studied from 1991 to 1999. Annual 10‐K filings were used as sources for financial and management data about the new ventures. Industry data were collected from Dunn's Industry Ratios.FindingsResults suggest that ventures which internationalize early are more likely to continue internationalizing at a higher rate as they mature. Early internationalization did not affect sales growth or financial performance of new ventures in the period after initiation. In addition, generic strategies of these ventures affected internationalization and financial performance differently.Research limitations/implicationsThe importance of venture strategy and prior internationalization effort should be considered when investigating the internationalization patterns and outcomes of new ventures. The small size of the sample and the focus on a limited number of variables limit the generalizability of this study.Practical implicationsNew venture managers should consider the role of generic strategy and prior internationalization efforts when planning future internationalization.Originality/valueThis research provides an initial understanding of what happens to new ventures as they begin to mature and in particular, the effects of early generic strategy and internationalization on later venture performance are identified.

FORMS OF ENTREPRENEURS' CAPITAL, VENTURE STRATEGY & PERFORMANCE.

In this study, we examine the origins of minority venture strategies and performance. We propose that the entrepreneur is central to venture strategy and performance. Specifically, the forms of cap...

Corporate Venture Capital Organizations in Germany

This paper analyses the goals, the organizational structures and processes, and the investment criteria that underlie venture strategies in Germany today, using a sample of 20 corporate venture capital organizations (CVCs). The performance of these CVCs is examined and the data are compared with those generated by studies on German independent venture capital organizations (VCs) as well as with European and US CVCs. The study concludes that German CVCs that focus either on financial or on strategic objectives are more successful than those with a mixed approach. Further, CVCs with a strong financial focus seem to be financially--and sometimes also strategically--more successful than CVCs with a strong strategic focus.

Shareholders Wealth Effects of Joint Venture Strategies

Shareholders Wealth Effects of Joint Venture Strategies

Selection and support strategies in venture capital financing: high-tech or low-tech, hands-off or hands-on?

The advantage of specialization in venture capital financing makes the presence of generalist investors perplexing. In order to understand their function, the authors investigate the knowledge resource bases of both generalist and specialist venture capital funds, the types of enterprises they select and their corresponding support strategies. Arguing that differences in strategy can be attributed to differences in knowledge, the authors hypothesize that specialists select high-tech projects; generalists, on the other hand, select low-tech projects. Specialists support ‘hands-off’; generalist support ‘hands-on’. These hypotheses are tested with a dataset of 103 venture capitalists in Austria, Germany and Switzerland. The empirical results from OLS-regressions show a close relationship between knowledge and selection as well as support strategies. These results invite further research on differences in venture capitalists' strategies as they relate to differences in knowledge.

Strategy and performance of new ventures: A contingency model of the role and influence of the venture capitalist

The strategic activities of venture capitalists are regarded as their major contributions to their portfolio companies' performance. However, apart from a general consensus as to the different supporting roles the VC provides, little is known about how the VC specifically adds value to the venture's strategy and performance. In our paper, we address the expected fit between the value-adding activities of the VC on the one hand and the venture's strategy on the other hand, showing that a multi-theoretical approach is instrumental to explore the value-adding contribution of the VC to the venture's strategy and performance.

New venture strategies in a developing country: Identifying a typology and examining growth patterns through case studies

This study explores the static and dynamic patterns of new venture strategy and growth. We developed a three-dimensional integrative framework on new venture strategies, proposed seven strategic types, and examined the dynamic patterns of internationalization and growth of new ventures. From successful new venture cases in Korea, each strategic type shows differences in environmental characteristics and competitive behaviors. Also, we found that new ventures enter the global market by following two-step internationalization processes. We observed two different growth patterns influenced by initial conditions, entrepreneur's management ability, and technology strategy of new ventures.

Interpartner Fit and Its Performance Implications: A Four-Case Study of U.S.-China Joint Ventures

In previous research on international joint ventures, a commonly accepted conceptualization and operationalization of interpartner fit is lacking. As a result, empirical studies have either failed to confirm theoretical predictions or produced inconsistent findings that are difficult to reconcile. Using a multiple-case method, this study developed a model in which interpartner fit is conceptualized as a multidimensional construct consisting of the compatibility between the partners strategic objectives, contribution and joint management of critical resources, consensus on the venture's operating culture and strategy, and structure of relative bargaining power and control over the venture's operation. The longitudinal case studies demonstrated the relationship between interpartner fit and joint venture performance and also revealed the rich dynamics and changes in interpartner fit'misfit over time.

Joint Ventures as an Internationalisation Strategy for SMEs

For some time believed to be inferior to Wholly Foreign-Owned Enterprises, Joint Ventures have become a popular vehicle for foreign market servicing. Although there are various proponents of the joint venture strategy as a means of enabling SMEs with limited productive resources and/or market knowledge to enter international markets, relatively few have focused on the actual joint venturing activities of SMEs. This article examines the activities of 9 U.K. and 12 German SMEs that have joint ventures in China. Based on a questionnaire survey and in-depth case interviews, it reveals that the initiatives appear to have been successful but that they are not without their problems and in many ways the experiences of the firms involved seem similar to those of the large multi-national enterprises. It argues that the key to success appears to be the choice of the joint venture partner and concludes that, given the limited resources of small firms, assistance is required to help them locate and select appropriate partners.

Screening For Successful Low‐Budget Marketing Strategies For New Ventures

Based upon a study of between fifty to sixty case examples of new venture start‐ups, the author presents a screening procedure for entrepreneurs to use when evaluating whether a proposed low‐budget marketing strategy for a new venture shows promise of being successful. The procedure consists of four sets of screening conditions. A well‐designed marketing strategy should have a reasonably good chance of being successful if it (1) will tightly integrate the product/service and price offerings, the intended distribution method, and the intended promotion plan with the new venture’s designated target market, (2) will encounter no serious marketing strategy execution difficulties which cannot be resolved, (3) uses marketing concepts which can be executed with a small marketing budget, and (4) displays three characteristics believed to be strongly associated with marketing strategies that are successful over the long term.

Implications of pricing strategy–venture strategy congruence: an application using optimal models in an international context

The value of any pricing strategy is questionable if it is not congruent with the overall strategy of the firm. Pricing strategies, which do no reflect organizational goals, can detrimentally affect performance outcomes. Determining the benefit of specific strategies calls for models adapted to effectively measure the congruence between pricing strategies and venture strategies, and the influence of that congruence on the appropriate measure of venture performance. In this article, the author uses a methodological alternative to traditional linear, analogue and distance models for determining the value of pricing strategies in international operations. Using data from a survey of international marketing managers, this article investigates the value of specific pricing strategies relative to achieving stated international venture objectives, this using optimal models with polynomial regression equations augmented by response surface methodology (RSM). The results indicate that specific pricing strategies differ significantly in their ability to enhance venture performance.

Autonomy and dependence of international cooperative ventures: an exploration of the strategic performance of U.S. ventures in Mexico

AbstractResearchers have begun to view international cooperative ventures as complex, multiparty organizations in which foreign and local firms and the venture itself all have distinctive roles. This approach has important implications for the venture strategies of foreign firms in emerging economies. This study explores relationships between the resource contributions of parent firms and U.S. managers' assessment of venture performance in a sample of established U.S.–Mexican ventures. The research suggests that mature cooperative ventures are expected to achieve autonomy from parent firms in key areas at the same time that certain forms of strategic dependency also are important to success. Copyright © 2002 John Wiley & Sons, Ltd.

ORTAK GİRİŞİM STRATEJİSİ İLE GLOBAL PAZARLARA GİRİŞ

There is no denying that international markets present a challenging and steadily growing opportunity for global expansion of the business base. One of the most significant developments in business practice in recent years has been the raped growth of international activities. The major considerations associated with entry into foreign locations are: direct exporting, indirect exporting, Licence, franchising, joint ventures and direct investment. This paper covers joint venture strategy with its advantages and disadvantages, in addition to emphasizing the factors for making a joint venture successful.

Shareholder Wealth Effects of Joint Venture Strategies: Theory and Evidence from The Netherlands

We investigate the shareholder wealth effects of 233 joint venture announcements of Dutch public companies in the period 1987 till 1998. The research shows that, on average, establishing joint ventures has a positive effect on the market value of Dutch companies. The results indicate that joint ventures are preferred when a company is under pressure. Our research also shows that the factors of strategic intention, the environment in which the strategy is unfolded and the extent to which the company has control over the implementation strongly explains the extent to which a joint venture can create value.

Shepherd, Dean A., Richard Ettenson and Andrew Crouch, 'New Venture Strategy and Profitability: A Venture Capitalists Assess ment', Journal of Business Venture, vol. 15, no. 5/6 (September- November 2000), pp. 449-67

Shepherd, Dean A., Richard Ettenson and Andrew Crouch, 'New Venture Strategy and Profitability: A Venture Capitalists Assess ment', Journal of Business Venture, vol. 15, no. 5/6 (September- November 2000), pp. 449-67

How does new venture strategy matter in the environment–performance relationship?

Drawing on environmental determinism and environmental management perspectives, this study examines the roles of strategy in the relationship between environment and performance in new ventures. With data from 184 ventures in China's high technology industries, I found that new venture strategies play differential roles in dealing with different environmental dimensions to affect performance. In particular, the results suggest that marketing differentiation strategy plays a significant role in mediating the positive effect of perceived industry growth on performance. Market breadth and marketing alliance strategies significantly moderate the negative impact of perceived environmental hostility on performance. Product innovation strategy plays both mediating and moderating roles in the environment–performance relationship. Theoretical and managerial implications are discussed.

Risk Sermayesi Şirket Karlılığının İçsel Unsurları

The viability of the venture capital industry is a function of its profitability. The purpose of this study is to describe internal determinants important to the profitable and effective management of venture capital funds. Characteristics and investment practices of venture capital organizations are termed internal determinants of profitability. Venture capital fund size and strategies such as staff density, specialization/diversification, staged financing, syndicated investment and follow-through policies are taken as internal determinants of profitability in the study.

Entry barriers and new venture performance: a comparison of universal and contingency approaches

AbstractThis study utilized universal and contingency approaches to empirically investigate the effects of entry barriers on new venture performance. Consistent with prior research utilizing the universal approach, this study found only limited support for the direct independent effects of entry barriers on performance. Conversely, this study provides strong support for utilizing the contingency approach to examine the complex effects of entry barriers on divergent performance measures. Overall, contingency models incorporating the theoretically justified moderating effects of industry life cycle stage and venture strategy explained 31, 61, and 45 percent of the variance in profitability, shareholder wealth creation, and sales growth respectively. Copyright © 2001 John Wiley & Sons, Ltd.

New venture strategy and profitability: A venture capitalist's assessment

This study uses theoretically justified criteria from the industrial organization (IO) strategy literature and applies it to a new domain, namely, venture capitalists' decision making. Specifically, the study investigates the types of information venture capitalists utilize when evaluating new ventures and how venture capitalists use this information to assess likely new venture profitability. In the interest of advancing our understanding of the decision making policies of venture capitalists, this study addresses many of the limitations of previous research. A review of IO research suggests important relationships between a number of strategy variables and new venture profitability. Some of the relationships proposed by IO strategy research are contingent in nature. The strategy variables and their relationships with profitability are investigated in the domain of venture capitalists' decision making. Individual and aggregate decision making analyses identified those strategy variables (criteria) venture capitalists utilize in assessing likely new venture profitability, namely, timing, key success factor stability, lead time, competitive rivalry, educational capability, industry-related competence, timing × key success factor stability interaction, timing × lead time interaction, and timing × educational capability interaction. On average, the most important criterion for venture capitalists in their assessment of profitability is industry-related competence. The second tier of importance is competitive rivalry, timing, and educational capability. The third tier of importance is lead time, key success factor stability, and timing × lead time interaction. Other interactions are less important. Therefore, while venture capitalists use contingent decision policies, main effects dominate. If venture capitalists use a reported 8 to 12 minutes on average to evaluate a business plan (Sandberg 1986), then this study's findings may help the inexperienced venture capitalist allocate time towards assessing those attributes of primary importance. Although more complex relationships exist between the attributes, the inexperienced venture capitalist can take comfort from this study's findings that main effects dominant amongst senior venture capitalists. Senior venture capitalists may take less comfort from their importance placed on main effects in light of research from IO, which suggests the importance of contingent relationships. The results may also have practical application towards training. How should venture capital firms train their new employees? Should venture capital firms rely solely on experienced venture capitalists lecturing the inexperienced on the criteria they use in assessing a new venture proposal? Like most decision makers, venture capitalists have limited insight into their assessments and venture capital firms need to be aware of the gap between “espoused” policies and policies “in use.” The information being taught needs to be supplemented with venture capitalists' decision-making research that investigates decision policies “in use”, such as this study. Venture capitalist training could also involve experiential learning, in conjunction with cognitive feedback about the decision policies used, to accelerate the learning process. Experiential learning using cognitive feedback maximizes industry related learning while minimizing the cost of inexperienced decisions. For the entrepreneur seeking capital, this increased understanding of venture capitalists' decision making may help them better target their business plans and presentations at those criteria venture capitalists' find most critical to the profitability of a new venture.

HOW DOES NEW VENTURE STRATEGY MATTER IN THE ENVIRONMENT-PERFORMANCE RELATIONSHIP?

Academy of Management Annual Meeting Proceedings includes abstracts of all papers and symposia presented at the annual conference, plus 6-page abridged versions of the “Best Papers” accepted for inclusion in the program (approximately 10%). Papers published in the Proceedings are abridged because presenting papers at their full length could preclude subsequent journal publication. Please contact the author(s) directly for the full papers. ArticlesHOW DOES NEW VENTURE STRATEGY MATTER IN THE ENVIRONMENT-PERFORMANCE RELATIONSHIP?Published Online:13 Dec 2017https://doi.org/10.5465/apbpp.2000.5438618AboutSectionsPDF/EPUB ToolsDownload CitationsAdd to favoritesTrack Citations ShareShare onFacebookTwitterLinkedInRedditEmail AbstractDrawing on environmental determinism and environmental management perspectives,this study examines the relationships between environment, strategy, and performance in new ventures. With data from 184 new ventures in China's high technology industries, we found that new venture strategies play differential roles in dealing with different environmental dimensions to affect performance. In particular, our results suggest that marketing differentiation plays a significant role in mediating the positive effect of perceived industry growth on performance for opportunity exploration. Market breadth and marketing alliance significantly moderate the negative impact of environmental hostility on performance. Product innovation plays both mediating and moderating roles in the environment-performance relationship. Theoretical and managerial implications are discussed.FiguresReferencesRelatedDetails Vol. 2000, No. 1 Permissions Metrics in the past 12 months History Published online 13 December 2017 Published in print 1 August 2000 InformationCopyright of Academy of Management Journal is the property of Academy of Management and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder’s express written permission. However, users may print, download, or email articles for individual use.KeywordsNEW business enterprises -- ManagementJOINT venturesBUSINESS enterprises -- Environmental aspectsENVIRONMENTAL engineeringSTRATEGIC planningHIGH technology industriesBUSINESS failuresSOCIAL responsibility of businessGROWTH industriesINNOVATIONS in businessINNOVATION managementDownload PDF