Evaluating Innovation Output of Companies Backed by Corporate, Independent and Syndicated Venture Capital

Abstract

This paper examines how Corporate Venture Capital (CVC), Independent Venture Capital (IVC) and Venture Capital Syndicate (VCS) promote innovation among startups. Drawing on a dataset of 4406 venture-backed deals in North America, spanning 1998–2019, it explores how the configurations of investors and their contextual factors influence innovation output. The findings show that syndicated and CVC-backed ventures outperform IVC-backed ventures. Syndicates with a larger membership are positively associated with innovation outcomes based on resource pooling and knowledge sharing; contextual factors, such as location and technology fit, environmental munificence and absorptive capacity have a positive moderating effect on the relationship between VC type and innovation outcomes. This research adds to both academic knowledge and practical implications, offering entrepreneurs, investors and policymakers' actionable insights about how to facilitate innovation, improve venture funding and enhance innovation management to ultimately strengthen the innovation ecosystem.