Business, Management and Accounting
8 months ago

Cross-border CVC investments boost venture firms' chances of IPO success

International Academy of Global Business and Trade
The Benefits of Cross-Border Corporate Venture Capital Investment on the Likelihood of a Venture Firm’’s IPO
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Cross-border corporate venture capital investments can increase the likelihood of a venture firm going public. A study looked at over 1,800 high-tech firms in the U.S. that received CVC investments between 1994 and 2009. They found that when foreign CVCs invest in a venture firm, it is more likely to have an IPO. However, if the CVC has a strict governance structure, this positive effect is reduced. This research shows that international CVC investments can benefit venture firms, but entrepreneurs should be cautious of CVC units with strong strategic goals.