Samantha Fragin
Pronouns: she/her
Research Mentor(s): Christine Choi
Research Mentor School/College/Department: Ross/ Strategy / Business
Program: UROPF
Session: Session 4 (1:40pm – 2:30pm)
Authors:
Abstract
Established firms (highly developed corporations) have begun employing corporate venture capital (CVC) investments, investments from corporations into startups, in order to source new resources. To achieve advantages from investing in firms, CVCs should invest in firms where they can obtain maximum knowledge/benefits. However, identifying beneficial investments is challenging. One way to mitigate this issue is to delve into other CVC investments in the venture. This study focuses on the intra-portfolio competition that could arise from multiple CVC investments in a venture and how it influences a CVCs decision to collaborate with the venture. To evaluate CVC investments and competition, I analyzed data about CVC investments in the healthcare and pharmaceutical firms from 1999 to 2020 through data analytics in STATA, a statistical analysis platform. I also matched CVC firms with their parent firm through Pitchbook, a private financial database, to obtain their business information. Lastly, I read past research about the CVC industry and conducted literature reviews to obtain a wider scope of knowledge on the goals of this research. Through this study, we found that CVCs are less likely to invest in ventures that have already received investments from other CVCs. Specifically, this negative relationship is highly prominent when CVC investors are on the board of the venture, the CVC has investments in the same sector/industry as the venture, and the CVCs are unsure of the potential value from the venture. Through this project, I’ve learned about diverse types of investments and when CVCs usually invest in firms; especially in the healthcare and pharmaceutical industry. I also assisted my mentor in sorting data, allowing me to learn statistical analysis. Overall, this research will also become a foundation for further research on CVC investments especially in how to mitigate intra-portfolio competition and how intra-portfolio competition impacts CVCs willingness to invest in ventures.
