Limitations to interorganizational knowledge acquisition: The paradox of corporate venture capital

Gary Dushnitsky, J. Myles Shaver

Research output: Contribution to journalArticlepeer-review

231 Scopus citations


By highlighting conditions under which viable interorganizational relationships do not materialize, we explore the limitations of interorganizational knowledge acquisition. In the empirical context of corporate venture capital (CVC), we analyze a sample of 1, 646 start-up-stage ventures that received funding during the 1990s. Under a regime of weak intellectual property protection (IPP), an entrepreneur-CVC investment relationship is less likely to form when the entrepreneurial invention targets the same industry as corporate products. In contrast, under a strong IPP regime, industry overlap is associated with an increase in the likelihood of an investment relationship. Our findings suggest that many relationships do not form because the corporation will not invest unless the entrepreneur discloses his or her invention, and the entrepreneur may be wary of doing so, fearing imitation. To the extent that a CVC has greater capability and inclination to target same-industry ventures, such industry overlap would exacerbate imitation concerns under a weak IPP regime, yet facilitate an investment relationship under a strong IPP regime. Beyond CVC, this insight may explain patterns of other interorganizational relationships, including research and development alliances and technology licensing between start-ups and incumbents.

Original languageEnglish (US)
Pages (from-to)1045-1064
Number of pages20
JournalStrategic Management Journal
Issue number10
StatePublished - Oct 2009


  • Alliance formation
  • Corporate entrepreneurship
  • Innovation
  • Knowledge acquisition
  • Mutual selection
  • Venture capital


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