More than Words:Is Startup’s Propensity to Patent and Publish Sensitive to Investor Characteristics?

Over the last decade, corporations became an increasingly important source of financing for innovative startups across a wide array of industries. This paper investigates the consequences of Corporate Venture Capital (CVC) investments: Do strategically-oriented CVCs affect startups' research productivity? Do CVC-backed startups overemphasize basic over applied research? We study these questions using a longitudinal sample of 591 U.S. biotechnology ventures founded from 1990 to 2003. We find that CVCs nurture the venture?s basic research more than VCs, especially when the CVC parent firm shares industry niche with the venture. And while CVCs also foster the venture?s applied research more than VCs, the effect is stronger when the CVC parent firm is in a different industry niche. In summary, our findings highlight the innovation implications of different investor types. ?