Venture Capitalists and Cooperative Start-Up Commercialization Strategy

Determines the extent to which venture capital-backedstartups engage in cooperative commercialization strategies and identifiespossible consequences of those strategies. After a review of the literature onthe extra-financial effects of venture capital (VC) on startups, a number ofhypotheses are presented. Two of these hypotheses predict that VC funding is associated with boosts instartup cooperative behavior and positively associated with a startup's initialpublic offering (IPO). The next two suggest that startups affiliated with morereputable VCs forge more cooperative outcomes and are more likely to achieve anIPO. According to the last hypothesis, VC-backed startups that go public have amore reputable IPO underwriter. Data containing information on 696 firms, some of which were VC-backed andsome of which were supported by the Small Business Innovative Research (SBIR)program, are used to test these hypotheses. Analysis of the data reveals thatthe hypotheses are viable. Several potential explanations for the findings areoffered. (SAA)