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Progress toward understanding tensions in corporate venture capital: A systematic review

July 2022
Journal of Business Venturing 37(4):106226

DOI:10.1016/j.jbusvent.2022.106226

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Authors:

Euiju Jeon

Technical University of Denmark

Markku Maula

Aalto University

We systematically review the past four decades of research on tensions in corporate venture capital (CVC) and inductively identify three main tensions: (1) multiple stakeholders championing CVC-based exploration versus core business-focused exploitation, (2) CVC programs simultaneously belonging to the corporate parent versus the startup/venture capital (VC) world, and (3) startups and VCs viewing CVC programs as a threat versus an opportunity. By combining the understanding of the CVC phenomenon with that of the paradox literature, we expand our understanding of why, how, and when contradictory goals and multiple stakeholder expectations result in tensions and how these tensions can be managed. *This paper is open access and can be downloaded at: https://doi.org/10.1016/j.jbusvent.2022.106226

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Jeon, Euiju; Maula, Markku

Progress toward understanding tensions in corporate venture capital: A systematic review

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Journal of Business Venturing

DOI:

10.1016/j.jbusvent.2022.106226

Published: 01/07/2022

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Jeon, E., & Maula, M. (2022). Progress toward understanding tensions in corporate venture capital: A systematic

review. Journal of Business Venturing, 37(4), [106226]. https://doi.org/10.1016/j.jbusvent.2022.106226

Journal of Business Venturing 37 (2022) 106226

Available online 6 May 2022

(http://creativecommons.org/licenses/by/4.0/).

Progress toward understanding tensions in corporate venture

capital: A systematic review

Euiju Jeon

, Markku Maula

Technical University of Denmark, Diplomvej, 371-212, 2800 Kgs. Lyngby, Denmark

Aalto University, P.O. Box 15500, FI-00076 Aalto, Finland

ARTICLE INFO

JEL code:

G24

M13

O31, O32

Keywords:

Corporate venture capital

Tensions

Paradoxes

Systematic review

ABSTRACT

We systematically review the past four decades of research on tensions in corporate venture

capital (CVC) and inductively identify three main tensions: (1) multiple stakeholders cham-

pioning CVC-based exploration versus core business-focused exploitation, (2) CVC programs

simultaneously belonging to the corporate parent versus the startup/venture capital (VC) world,

and (3) startups and VCs viewing CVC programs as a threat versus an opportunity. By combining

the understanding of the CVC phenomenon with that of the paradox literature, we expand our

understanding of why, how, and when contradictory goals and multiple stakeholder expectations

result in tensions and how these tensions can be managed.

1. Executive summary

Corporate venture capital (CVC)—equity investments made by established rms in entrepreneurial startups—is an important

phenomenon that is rife with tensions. Despite the accumulation of research on CVC, the progress made toward understanding these

tensions has not been reviewed. Reviewing this research is important because it adds to our understanding of why, how, and when

contradictory goals and multiple stakeholder expectations inuence stakeholders’ behaviors and CVC performance and how these

tensions can be managed to produce positive outcomes. We conducted a systematic review of the CVC literature from 1981 to 2019 and

identied a large number of tensions examined in the literature, which we further distill into three main tensions: (1) multiple

stakeholders championing CVC-based exploration vs. core business-focused exploitation, (2) CVC programs simultaneously belonging

to the corporate parent vs. the startup/venture capital (VC) world, and (3) startups and VCs viewing CVC programs as a threat vs. an

opportunity. We further reviewed the literature on how these tensions can be managed. To address the limitations identied in our

review and to facilitate continued progress in the understanding of the tensions in CVC, by drawing on insights from the paradox

literature, we discuss the paradoxical nature of the main tensions and propose avenues for future research. We advance the research on

tensions in CVC by identifying the main tensions in CVC, examining the progressive understanding of these tensions, and drawing on

the paradox perspective to propose avenues for future research.

2. Introduction

Corporate venture capital (CVC) refers to direct minority equity investments made by established rms in privately held young and

* Corresponding author.

E-mail addresses: euije@dtu.dk (E. Jeon), markku.maula@aalto. (M. Maula).

Contents lists available at ScienceDirect

Journal of Business Venturing

journal homepage: www.elsevier.com/locate/jbusvent

https://doi.org/10.1016/j.jbusvent.2022.106226

Received 12 August 2020; Received in revised form 5 April 2022; Accepted 12 April 2022

Journal of Business Venturing 37 (2022) 106226

entrepreneurial startups (Dushnitsky and Lenox, 2005b). CVC investments are generally made through dedicated CVC programs of

established rms and are often syndicated with independent venture capital (VC) rms. Because CVC investments occur in interfaces

among established rms, startups, and VC investors who have different perspectives, objectives, and practices, CVC is a complex

phenomenon that is prone to contradictions and tensions. In the past four decades of research on CVC, a large number of tensions have

been discussed at different levels and from different perspectives.

Although the CVC phenomenon is rife with tensions due to the commonly pluralistic objectives of CVC (e.g., strategic and nancial

goals (Dushnitsky and Lenox, 2006; Siegel et al., 1988)) and multiple stakeholders’ involvement at various organizational levels (e.g.,

Dokko and Gaba, 2012; Keil et al., 2008a; Maula et al., 2009; Souitaris and Zerbinati, 2014; Weber and Weber, 2011), the CVC

literature has stagnated by using “tension” or “paradox” thus far only as a label without considering the potential insights that might be

drawn from the paradox literature. A paradoxical tension, or paradox, is parsimoniously dened as a “persistent contradiction between

interdependent elements” (Schad et al., 2016: 10). The paradox literature nds that the mismanagement of paradoxes can cause

ambivalence, chaos, collapse, conict, and organizational decline, whereas effective engagement with paradoxes results in ambi-

dexterity, creativity/innovation, effectiveness, learning, legitimacy, sustainability, and long-term performance (Lewis and Smith,

2014; Schad et al., 2016). Furthermore, the paradox literature provides insights into how to identify paradoxes, how and why they

arise, when they become salient or remain latent, how they can be managed, and what their outcomes are (Schad et al., 2016). Thus, it

is important to systematically review the tensions in the CVC phenomenon and to draw on insights from the paradox literature because

this contributes to the understanding of why, how, and when contradictory goals and multiple stakeholder expectations result in

tensions and how such tensions inuence stakeholders’ behaviors and CVC performance and can be managed to produce positive

outcomes.

The purpose of this paper is to address this gap by identifying the main tensions in the CVC phenomenon, evaluating the progressive

understanding of these tensions, and drawing on the paradox perspective to propose directions for future research through a systematic

review of the CVC literature from 1981 to 2019. In our review of the literature on the tensions in CVC, we introduce the paradox lens (e.

g., Cunha and Putnam, 2019; Lewis, 2000; Putnam et al., 2016; Schad et al., 2016; Schad et al., 2019; Smith and Lewis, 2011) to the

CVC literature, thereby enriching the theoretical base of the CVC literature and paving the way for novel contributions in both the CVC

and paradox literature. In particular, we expect this review and the identied future research directions to facilitate continued progress

in the understanding of tensions in CVC.

The rest of the paper is structured as follows. In the next section, we introduce the multiple interfaces and levels of the CVC

phenomenon and explain how paradox theory can be useful for identifying and reviewing the tensions in CVC. Thereafter, we elaborate

on the methods we used to select our corpus of CVC articles and systematically and inductively identify the tensions in the CVC

phenomenon. Then, we review the tensions that we identied in the CVC phenomenon. Finally, by drawing on insights from the

paradox literature, we discuss the paradoxical nature of the main tensions in CVC and propose avenues for future research.

3. CVC phenomenon and the paradox theory

To identify the key areas of tension in CVC, it is rst helpful to consider the CVC phenomenon and the many interfaces that a CVC

program has with other parts of the corporate parent and with the VC and startup communities. As noted in the introduction, CVC

investments are minority equity investments made by established rms in entrepreneurial rms (Dushnitsky and Lenox, 2005b). These

investments have implications for CVC parent corporations, portfolio companies, and their stakeholders.

Within the parent corporation, CVC is often organized as a dedicated program, and multiple levels of managers are involved in the

CVC decision-making process. In many CVC programs, investment committees composed of senior and business unit (BU) managers

oversee CVC activity and approve changes in the investment charter (Bleicher and Paul, 1987; Hill and Birkinshaw, 2014; Weber and

Weber, 2011; Winters and Murn, 1988). BU, R&D, and corporate development managers discuss the technology roadmap of the

parent rm and the strategic priorities of the CVC program; they support the CVC activities by taking part in the due diligence processes

and the activities of monitoring, advising, or managing portfolio startups (Basu et al., 2016a; Bleicher and Paul, 1987; Hill and Bir-

kinshaw, 2014; Winters and Murn, 1988). It has been observed in prior research that multiple levels of managers involved in the CVC

decision-making process have pluralistic interests, goals, and perspectives (e.g., Keil et al., 2008a), which can trigger various types of

tensions. For example, it has been noted that CVC programs often face internal resistance from mainstream units while emulating the

practices and structures of VCs (e.g., Basu et al., 2016a).

CVC programs actively make investments in startups and often coinvest with VCs (Basu et al., 2016a; Hill and Birkinshaw, 2014;

Weber and Weber, 2011). A large majority of CVC programs have pluralistic goals and invest in startups not only to gain nancial

returns but also to achieve strategic benets, which include (i) learning about new technologies, markets, and business models, (ii)

creating complementary demands for their core products/services and building ecosystems, and (iii) using CVCs as stepping-stones for

future alliances and acquisitions (Basu et al., 2016b; Dushnitsky, 2006; Maula, 2007). CVC programs’ pursuit of strategic goals often

clashes with the nancial goals of the VCs and the desire for ownership and control of portfolio startups (e.g., Katila et al., 2008;

For recent reviews of the CVC literature, see Dushnitsky (2006), Maula (2007), Basu et al. (2016b), and Keil et al. (2016). Additionally, the CVC

literature has been discussed as part of the broader literature, such as the entrepreneurial equity nancing literature (Drover et al., 2017), VC

literature (Da Rin et al., 2013), and corporate venturing literature (Narayanan et al., 2009). In our review of the research on the tensions in CVC, we

do not primarily focus on tensions among scholarly works; instead, we primarily focus on identifying and addressing the tensions in the phe-

nomenon or practice of CVC.

E. Jeon and M. Maula

Journal of Business Venturing 37 (2022) 106226

Masulis and Nahata, 2009). In particular, startups frequently weigh the potential value-added they could receive from CVC investors as

a part of the investment against potential risks (Maula et al., 2009) and safeguard their position by building investment syndicates

consisting of both independent VCs and other CVC investors (Hallen et al., 2014). Thus, multiple stakeholders in CVC have contra-

dictory interests and objectives, which can lead to many different types of tensions.

To identify and review the tensions in the CVC phenomenon, it is also important to understand the relevant denitions and theory

on such tensions. Paradox theory is a meta-theory that offers a lens through which the tensions in organizations resulting from

contradictory goals, multiple stakeholder expectations, and pluralistic missions can be understood (Schad et al., 2016; Schad et al.,

2019). The exploration-exploitation tension, which many organizations seek to manage through organizational ambidexterity, is an

example of an organizational tension that has been widely researched using the paradox lens in the areas of entrepreneurship and

strategy research (e.g., Andriopoulos and Lewis, 2009; Maclean et al., 2020; Smith and Tushman, 2005).

In paradox theory, tensions are seen as the starting point (Putnam et al., 2016: 68, Schad et al., 2019: 109). When such tensions are

characterized by contradictions between simultaneously existing elements, they are considered to be paradoxical (Cameron and

Quinn, 1988; Schad et al., 2016; Schad et al., 2019). The concept of paradox was formally dened by Smith and Lewis (2011: 382) as

“contradictory yet interrelated elements that exist simultaneously and persist over time,” with slightly different denitions and in-

terpretations existing in the rapidly growing literature on organizational paradoxes, as well as related concepts such as tensions,

contradictions, dilemmas, and dialectics, as reviewed by Schad et al. (2016) and Putnam et al. (2016). In the related literature (e.g.,

Lewis, 2000; Schad et al., 2016; Smith and Lewis, 2011) and in our paper, paradoxes are also referred to as paradoxical tensions.

Different strands of paradox research have assumed paradoxical tensions to be either inherent (i.e., existing within the system, such

as the need for rms to explore and exploit (Raisch et al., 2009, Smith, 2014)) or socially constructed (i.e., created by actors’ cognition

or rhetoric (Schad et al., 2019; Smith and Lewis, 2011)). These differences in ontological assumptions lead to different available

solutions for addressing paradoxes in organizations. Although for some tensions, choosing among competing alternatives could offer a

short-term solution, the paradox perspective argues that “long-term sustainability requires continuous efforts to meet multiple

divergent demands” (Smith and Lewis, 2011: 381). Generally, in addition to the “either-or” solutions (e.g., prioritizing one of the two

opposite poles) suggested by contingency theory, the paradox literature has found that organizational members can cope with par-

adoxes by using “both-and” strategies, in which both poles of a tension are treated as inseparable and interdependent (e.g., balancing

between opposite poles through structural or contextual ambidexterity) (Lewis and Smith, 2014) or “more than” coping strategies that

connect opposite poles by moving outside of them or situating them in a new relationship (Cunha and Putnam, 2019; Putnam et al.,

2016). Given that paradoxical tensions occur and become salient at different organizational levels, the paradox literature has also

considered potential responses at different levels as both collective and individual approaches (Schad et al., 2016). At the macro- and

meso-levels, a paradox can be managed not only by accepting and learning to live with it (Cameron and Quinn, 1988) but also by

situating the contradictory elements in separate levels or locations, at different times, or nding a novel solution that considers both

paradoxical elements (Poole and Van de Ven, 1989; Schad et al., 2016). At the micro-level, a paradox can be managed through

paradoxical, discursive, or integrative thinking or through the use of coping skills such as irony or humor (Schad et al., 2016).

The extant paradox literature has identied four generic types of organizational paradoxes (Lewis, 2000; Schad et al., 2016; Smith

and Lewis, 2011): learning (e.g., old vs. new), belonging (e.g., collective vs. individual identities), organizing (e.g., rigid vs. exible),

and performing (e.g., internal vs. external demands). However, it has been warned that adopting an a priori category-based system

could lead to ignoring other types of paradoxes that do not t neatly in the four-part classication (Cunha and Putnam, 2019).

Consequently, we take an inductive approach to identify and review the tensions in the CVC phenomenon. In this review, we combine

the understanding of the CVC phenomenon with that of the paradox literature to evaluate how the understanding of the tensions in the

CVC phenomenon has progressively developed, taking into account multiple stakeholders’ perspectives at various organizational

levels.

4. Methods

To ensure rigor, we sought to follow the recent guidelines on designing and implementing rigorous and systematic literature re-

views (e.g., Bacq et al., 2021; Simsek et al., 2021). To conduct our systematic review of the CVC research covering the period from

1981 to 2019, we sought to identify relevant CVC articles in leading peer-reviewed journals because they are considered to be vali-

dated knowledge that has a large impact on scholarship (Podsakoff et al., 2005). To identify relevant CVC articles, we searched for

terms such as “corporate venture capital,” “corporate entrepreneurship,” “corporate investor,” and “external corporate venturing.” We

rst read the title, abstract, and keywords of the searched articles to identify articles relevant to tensions in CVC and to exclude

irrelevant articles. If it was unclear whether the article was relevant for our review based on the information above, we read the full

article to conrm its relevance. To identify relevant peer-reviewed CVC articles, we used several search strategies as described below.

First, we searched for CVC articles in the 50 journals listed in the Financial Times (FT) Research Rank 2016. This search led to the

identication of 80 CVC articles in the following journals: (1) management journals: Academy of Management Journal, Administrative

Science Quarterly, Strategic Management Journal, Organization Science, Management Science, Journal of Management, Journal of Man-

agement Studies; (2) innovation and entrepreneurship journals: Journal of Business Venturing, Entrepreneurship Theory and Practice,

Strategic Entrepreneurship Journal, Research Policy; (3) nance journals: Journal of Financial and Quantitative Analysis, Journal of Financial

E. Jeon and M. Maula

Journal of Business Venturing 37 (2022) 106226

Economics, Review of Financial Studies; and (4) a management information systems journal: Information Systems Research.

If the search

of an FT50 journal resulted in zero CVC articles, we did not include the journal in the above list.

Then, as we noticed that many inuential CVC articles have been published in journals outside the FT50, to ensure comprehensive

coverage of CVC research, we employed the snowball approach and collected additional relevant articles in the references of the

articles we previously identied. We also searched for additional high-quality CVC papers from the Web of Science SSCI database and

Google Scholar.

These approaches resulted in 31 additional CVC articles published in the following peer-reviewed journals that

frequently publish CVC papers: Journal of Banking & Finance, Financial Management, Journal of Financial Intermediation, Small Business

Economics, Journal of Economics & Management Strategy, Journal of Product Innovation Management, Long Range Planning, Journal of

Business Research, and Venture Capital: An International Journal of Entrepreneurial Finance. As the systematic review focuses on peer-

reviewed primary studies, we excluded books, book chapters, and other non-peer-reviewed publications from the corpus of the re-

view (Podsakoff et al., 2005). For the same reason, we also excluded introductory articles to special issues, review articles, and

commentaries from the corpus (e.g., Busenitz et al., 2003).

Altogether, this process resulted in 111 peer-reviewed CVC articles.

Table 1 below shows the number of articles by journal.

For the 111 articles, we coded the research question, theoretical background, sample, dependent variable, independent variables,

key hypotheses, main ndings, and CVC tensions of each article. By adopting the paradox lens, we further analyzed the tensions; we

identied the actor(s) experiencing the tensions; the type and paradoxical characteristic of the tensions; why and how the tensions

arise; the interface and level at which the tensions occur; and how the tensions can be managed or coped with (Andriopoulos and Gotsi,

2017; Schad et al., 2016).

To review and synthesize the prior literature, given the limited number of studies focusing on any particular tension in CVC, instead

of using an aggregative synthesis approach such as meta-analysis, which focuses on quantitatively synthesizing effect sizes from

multiple homogenous primary studies, we opted for a more interpretative synthesis approach (Briner and Denyer, 2012; Rousseau

et al., 2008). Although we did not limit the review to case studies, we largely followed a meta-synthesis approach (Hoon, 2013;

Traneld et al., 2003), which is an inductive research design in which primary studies are synthesized to gain further insights.

This

approach can add objectivity to the synthesis of the prior research as part of the systematic review.

To add rigor and transparency to the review when inductively distilling a large number of identied tensions into a smaller number

of main tensions, we applied the Gioia data structure, which is part of the Gioia methodology for enhancing qualitative rigor in

inductive studies (Gioia et al., 2013).

While using this type of data structure as a tool has its origins in grounded theory research

methods, it has been found to be useful in a wide variety of contexts, including in paradox research (e.g., Andriopoulos and Lewis,

2009; Calabretta et al., 2017; Foege et al., 2019; Pamphile, 2021; Smith, 2014) and systematic literature reviews (Kerr and Coviello,

2019). In our systematic review, we aggregated the tensions identied for each article (i.e., rst-order concepts) up to higher levels (i.

e., second-order themes) and nally classied them under aggregate dimensions. The resulting data structure is presented below in

Fig. 1. Along with the data structure, we visualized the interfaces and levels of the CVC phenomenon in Fig. 2. In the following section,

we discuss the results of our review.

5. Review of tensions in the CVC literature

Our review of the literature on CVC results in the following three main tensions: (i) CVC-based exploration vs. core business-focused

exploitation (multiple stakeholder perspective); (ii) CVC as part of a parent corporation vs. a VC/startup community (CVC program

perspective); and (iii) CVC as a threat vs. an opportunity (VC/startup perspective).

First, the “CVC-based exploration vs. core business-focused exploitation” refers to the tensions related to CVC programs struggling

to champion and justify CVC activity as an important strategic exploration tool, whereas decision-makers focusing on core businesses

emphasize exploitation and often perceive CVC as a costly and risky noncore activity that needs to be reduced or even divested,

especially when the nancial situation calls for cost cutting. As shown in Fig. 2, this championing process is inuenced by external

stakeholders such as (1) shareholders and nancial analysts, whose interests or perspectives are voiced to management, or (2) peer

corporations, whose behaviors and performances are benchmarked by management and investors. Additionally, the CVC championing

process involves internal stakeholders such as (3) senior managers, BUs, R&D units, and corporate development units.

Second, the “CVC as part of a parent corporation vs. a VC/startup community” refers to the tensions related to the CVC program

We excluded practitioner journals such as Harvard Business Review and Sloan Management Review from the corpus of peer-reviewed CVC

studies.

We checked the quality of the papers based on a combined factor of each article's annual citation and relevance to CVC tensions, each journal's

rank in journal quality lists, and each journal's relevance to hosting CVC articles.

Although not included in our corpus, we incorporated insights from the relevant practitioner literature, reviews, and inuential working papers

to ensure a comprehensive understanding of the phenomenon and the literature when evaluating the CVC literature, putting the studies in the

corpus in perspective, and considering avenues for future research.

Hoon (2013) proposes the following eight steps for meta-synthesis research design: Step 1: Framing the research question; Step 2: Locating

relevant research; Step 3: Inclusion/exclusion criteria; Step 4: Extracting and coding data; Step 5: Analyzing on a case-specic level; Step 6: Syn-

thesis on a cross-study level; Step 7: Building theory from meta-synthesis; and Step 8: Discussion. Our systematic review largely followed these steps

except for Steps 5 and 6 in which we focused on the tensions identied in the paper rather than cases.

We refer to the Gioia data structure instead of the Gioia methodology because some parts of the Gioia method (Gioia et al., 2013) are limited to

interview-based qualitative studies, while the data structure is an aggregation tool that is also applicable to a meta-synthesis such as ours.

E. Jeon and M. Maula

Journal of Business Venturing 37 (2022) 106226

simultaneously belonging to the two uncoordinated worlds of the corporate parent and the VC/startup community; the CVC program

has to balance its position between the two worlds, as seen in Fig. 2 interface (4).

Third, the “CVC as a threat vs. an opportunity” concerns the tensions related to corporate investors posing a threat by behaving

opportunistically versus providing an opportunity as a valuable partner to startups or coinvestors, which leads to complex issues when

forming CVC investment relationships and managing them. The CVC program has to manage its relationships with (5) the existing

portfolio companies, (6) potential new portfolio companies (i.e., deal ow), and (7) independent VCs (i.e., current and potential

coinvestors) (refer to Fig. 2).

A summary of our systematic review of the literature on the tensions in CVC is presented in Table 2. To analyze the progressive

understanding of CVC tensions, we conducted a heat map analysis by taking the rst-order tension as the unit of analysis,

as shown in

Fig. 3. Each cell shows the frequency of the rst-order tension for each year. In the last two columns, for each rst-order tension, we

show the total number of rst-order tensions aggregated over all of the years and its percentage; in the last two rows, we show the total

number of rst-order tensions for each year and its percentage. In the following sections, we elaborate on the progressive under-

standing of tensions in CVC and how such tensions can be managed.

5.1. CVC-based exploration vs. core business-focused exploitation (multiple stakeholders)

A crucial tension of CVC within corporations is the prevalent opposing views of CVC as a valuable strategic exploration tool that is

worthy of investment and of management attention versus a costly and risky noncore activity that should be reduced and divested to

focus on core activities and pursue exploitation. This CVC-context specic tension relates to the broader organizational exploration-

exploitation tension (Andriopoulos and Lewis, 2009; Lavie et al., 2010), in which companies simultaneously have to explore new

businesses through innovation, search, experimentation, and variation and exploit to enhance the productivity and efciency of the

existing core businesses through renement, choice, execution, and variance reduction (March, 1991). Hence, the existence of a CVC

program and its investment activities must be continuously championed and justied to external and internal stakeholders, such as

analysts, shareholders, and BU managers. Because many of these tensions exist and make CVC difcult to manage and justify, CVC

programs have often been short-lived (Rind, 1981) and cyclical (e.g., (Allen and Hevert, 2007, Da Gbadji et al., 2015). The earlier

literature examined how CVC investments are perceived by corporate decision-makers as a valuable strategic tool as opposed to a

costly and risky noncore activity (e.g., Allen and Hevert, 2007; Dushnitsky and Lenox, 2006). Later, the literature began to more

extensively examine when tensions become latent or salient (e.g., Basu et al., 2011; Dushnitsky and Lenox, 2005b). More recently, the

literature has also considered how various external or internal stakeholders partake in and inuence the process of championing CVC-

based exploration vs. core business-focused exploitation (e.g., Gaba and Dokko, 2016; Keil et al., 2008a). Among the three main

Table 1

Number of peer-reviewed CVC articles in the corpus by journal.

Journal Count

Journal of Business Venturing 16

Strategic Management Journal 12

Strategic Entrepreneurship Journal 10

Entrepreneurship Theory and Practice 9

Venture Capital: An International Journal of Entrepreneurial Finance 7

Small Business Economics 6

Organization Science 5

Academy of Management Journal 5

Research Policy 4

Journal of Business Research 4

Long Range Planning 4

Journal of Financial Economics 4

Journal of Product Innovation Management 3

Journal of Management Studies 3

Journal of Management 3

Administrative Science Quarterly 3

Journal of Economics & Management Strategy 2

Financial Management 2

Journal of Financial and Quantitative Analysis 2

Journal of Banking & Finance 2

Review of Financial Studies 2

Journal of Financial Intermediation 1

Information Systems Research 1

Management Science 1

Total 111

Because we used the tension as our unit of analysis, each article can be related to two or more main tensions and even no main tension. Among

the 111 articles in the corpus, 94 articles fall under one main tension, 14 articles fall under at least two main tensions, and 3 articles do not fall under

any of the three main tensions and are related to different types of tensions. These classications are marked in Appendix 1.

E. Jeon and M. Maula

Journal of Business Venturing 37 (2022) 106226

CVC as a strategic and financial tool

vs. a risky and costly tool

(Corporate perspective)

CVC-based

exploration vs. core

business-focused

exploitation

(Multiple

stakeholders)

Pressure to adopt CVC for long-term

innovation and growth vs. abandon CVC to

achieve short-term profitability

(External stakeholder perspective)

CVC as a complementary and essential tool

vs. a disruptive and risky tool

(Internal stakeholder perspective)

VC capabilities and networks

vs. corporate capabilities and networks

(CVC program perspective)

VC rules of the game

vs. corporate policies and structures

(CVC program perspective)

CVC as a a value-adding investor

vs. risk of misappropriation

(Startup perspective)

CVC as a value-adding coinvestor

vs. a bureaucratic and opportunistic coinvestor

(VC perspective)

CVC as part of

a corporate parent vs.

aVC/startup

community

(CVC program)

CVC as a threat vs.

an opportunity

(VC/startup)

order themes1

order concepts Aggregate dimensions

•CVC is a tool to foster long-term growth and innovation, and to raise financial returns

•Specific industry and firm characteristics help justify CVC

•Shareholders and financial analysts often demandshort-term financial results

•Industry peer firms enact peer pressure to abandon CVC

•Markets require future growth and CVC is a tool to explore future growth opportunities

•Industry peer firms enact peer pressure to adopt CVC

•VC compensation with carried interes t

•CVC program autonomy

•Legitimacy of the CVC pr ogram within the parent corporation

•Recruiting corporate executives and R&D professionals inthe CVC program

•Legitimacy of the CVC program in the startup/VC community

•Recruiting VC professionals in the CVC program

•CVCs could add value to portfolio companies through their R&D resources, manufacturing

capability, distribution channels; and brand, and offer strategic guidance and managerial

advice

•CVCs could misappropriate the IPRs of the fledgling portfolio companies; stifle innovation

and/or inhibit growth by interveningin startup management; and/or limit partnering

opportunities with other corporations

•Corporate salary policies

•Corporate parent’s control and integration of the CVC program

•Corporations can be valuable coinvestorsbringing complementary resources and capabilities to

the syndicates

•CVCs could be slow, bureaucratic, and opportunistic coinvestors

•Risk of financial loss, risk of inconstant CVC operations because of employeeturnover, change

in strategic focus, econ omic downturn, and cost cutting

•CVC can offer support for BUs, complement R&D, alliances, and acquisitions, and work as

long-term innovation tool tosenior managers for stakeholder satisfaction

•CVC can be difficult to manage disrupting BUs, substituting internal R&D or alliance and

acquisition activities, posing employment/compensation risks to senior managers

Fig. 1. Data structure.

E. Jeon and M. Maula

Journal of Business Venturing 37 (2022) 106226

tensions, this tension has been most extensively studied, accounting for 55% of all CVC tensions (see Fig. 3).

5.1.1. CVC as a strategic and nancial tool vs. a risky and costly tool (corporate perspective)

Implicitly taking the corporate decision-makers’ perspective, one stream of literature has considered the tensions between

perceiving CVC as a tool that brings strategic benets and nancial returns as opposed to a tool that is costly, risky, and inconstant

(Allen and Hevert, 2007; Dushnitsky and Lenox, 2006; Ma, 2019; Maula et al., 2013; Rind, 1981; Riyanto and Schwienbacher, 2006).

Additionally, taking an implicit corporate decision-makers’ perspective, another stream has suggested that CVC is increasingly

adopted when it is viewed as a tool that is more benecial than costly and when the previous tensions become latent in the face of

increasing technological change, uncertainty, and competition (e.g., Basu et al., 2011; Kim et al., 2016; Ceccagnoli et al., 2018); when

the corporate investor is operating under weak intellectual property protection (IPP) regimes and well-developed nancial markets (e.

g., Da Gbadji et al., 2015; Dushnitsky and Lenox, 2005a; Dushnitsky and Lenox, 2005b); and when the corporate investor holds

important complementary assets (e.g., Dushnitsky and Lenox, 2005b). Whereas the rst stream of the literature preceded that of the

second, the latter stream has grown more extensively, especially in the recent two decades.

The tension on “CVC as a strategic and nancial tool vs. a risky and costly tool” has been the most studied second-order tension in

the CVC literature, accounting for 35% of all tensions (see Fig. 3). Moreover, the literature has suggested that this tension can be dealt

with by the CEO and top management team communicating their commitment to CVC and enlightening every stakeholder in the

organization to understand the motivations, goals, benets, risks, and costs of setting up a CVC program (Bleicher and Paul, 1987;

Rind, 1981), CVC programs sharing their progress with stakeholders who are skeptical about the CVC programs (Winters and Murn,

1988), CVC programs making repeated investments and stafng former venture capitalists (Gaba and Dokko, 2016), CVC programs

reducing the risk and keeping their goals intact by forming syndicates with coinvestors (Rind, 1981), or corporations learning to build

external corporate venturing capabilities (Keil, 2004).

5.1.2. Pressure to adopt CVC for long-term innovation and growth vs. abandon CVC to achieve short-term protability (external stakeholder

perspective)

In the past decade, CVC research has begun to recognize that various stakeholders outside the organization such as peer rms,

institutional shareholders, or nancial analysts create pressure or provide legitimacy to champion CVC for long-term innovation and

growth vs. abandon CVC to achieve short-term protability and better focus on the core. One stream of the literature has suggested that

peer rms act as social referents and that their behavior or performance inuences the legitimacy of CVC programs (Gaba and Dokko,

Interface

Potential deal flow

Ownership

Shareholders

R&D/

Corp

Dev

Parent Corporation

TMT Peer Corporation

VC/Startup

(1)

(2)

(3)

(4)

VC 1 VC 2

(5) (6)

(7)

Venture

CVC

Fig. 2. CVC as a phenomenon: Interfaces and levels of CVC.

E. Jeon and M. Maula

Journal of Business Venturing 37 (2022) 106226

Table 2

Summary table of the review of tensions in CVC.

Aggregate dimensions 2

order themes 1

order concepts Illustrative quotes Representative

studies

CVC-based exploration vs.

core business-focused

exploitation

(Multiple

Stakeholders)

CVC as a strategic and nancial tool

vs. a risky and costly tool (Corporate

perspective)

CVC yields strategic benets and nancial

returns to corporate investors vs. CVC as a

costly, risky, and often inconstant tool.

•“CVC may offer a valuable window on

technology, as it provides an effective means

of scanning the environment for novel

technologies that either threaten or

complement core businesses. Such benets,

however, may be diminished due to internal

conicts, lack of incentives for fund

managers, and rampant information

asymmetries leading to potential adverse

selection” (Dushnitsky and Lenox, 2006: 754)

Rind (1981)

Bleicher and Paul

(1987)

Winters and

Murn (1988)

Schildt et al.

(2005)

Dushnitsky and

Lenox (2006)

Riyanto and

Schwienbacher

(2006)

Allen and Hevert

(2007)

Benson and

Ziedonis (2009)

Fulghieri and

Sevilir (2009)

Yang et al. (2009)

Benson and

Ziedonis (2010)

Van de Vrande

et al. (2011)

Maula et al. (2013)

Flamand and

Frigant (2017)

Arruda et al. (2013)

Ma (2019)

CVC as a useful tool in the face of

technological change, uncertainty,

competition, weak IPP, well-developed

nancial markets, when the corporate

investor holds important complementary

assets

•“In industries with rapid technological

change, existing products and technologies

are rapidly rendered obsolete as new products

and technologies are created. Firms in these

industries need to continuously develop new

resources as new sources of value creation

and appropriation […] The option value of

these [CVC investment] initiatives can be

high in technologically dynamic industries

because breakthrough products or

technologies are often developed by new

ventures… the rate of technological change in

a rm’s primary industry will increase its

incentives to form new CVC partnerships”

(Basu et al., 2011: 155)

•“Corporations based in entrepreneurial

environments with entrepreneur friendly

conditions that promote high-growth ven-

tures are more likely to run VC programs

because doing so offers more attractive in-

vestment opportunities. These conditions

include ‘nancial’ conditions, such as a

developed market for early-stage nancing,

good exit routes, and ‘regulatory’ conditions

(e.g., low personal bankruptcy costs)” (Da

Gbadji et al., 2015: 1219)

Sykes (1986)

Siegel et al. (1988)

Winters and

Murn (1988)

Sykes (1990)

Dushnitsky and

Lenox (2005a)

Dushnitsky and

Lenox (2005b)

Weber and Weber

(2005)

Dushnitsky and

Lenox (2006)

Wadhwa and

Kotha (2006)

de Bettignies and

Chemla (2008)

Benson and

Ziedonis (2009)

Dushnitsky and

Shaver (2009)

Fulghieri and

Sevilir (2009)

Yang et al. (2009)

Sahaym et al.

(2010)

Basu et al. (2011)

Weber and Weber

(2011)

Lin and Lee (2011)

Maula et al.

(2013)

Wadhwa and Basu

(2013)

Hill and

Birkinshaw (2014)

Yang et al. (2014)

Da Gbadji et al.

(2015)

Anokhin et al.

(2016)

Colombo and Sha

(2016)

Kim et al. (2016)

Mohamed and

Schwienbacher

(2016)

Wadhwa et al.

(2016)

Weber et al. (2016)

Georgallis and

Durand (2017)

Titus et al. (2017)

Belderbos et al.

(2018)

Ceccagnoli et al.

(2018)

Titus and Anderson

(2018)

de Leeuw et al.

(2019)

Ma (2019)

Cirillo (2019)

(continued on next page)

E. Jeon and M. Maula

Journal of Business Venturing 37 (2022) 106226

Table 2 (continued )

Aggregate dimensions 2

order themes 1

order concepts Illustrative quotes Representative

studies

Smith and Shah

(2013)

Van de Vrande

(2013)

Junni et al. (2019)

Titus et al. (2020)

Pressure to adopt CVC for long-term

innovation and growth vs. abandon

CVC to achieve short-term

protability (External stakeholder

perspective)

Shareholder and analyst pressure to achieve

short-term protability vs. fostering long-term

growth and innovation through CVC

•“Because of the monitoring and rewarding of

institutions on a quarterly basis, these rms

pursue short-term gains; as such, the man-

agement of the rms in which they hold stock

receive pressure to adopt a short-term focus.

Relatedly, research has suggested that insti-

tutional investors prefer corporate invest-

ment strategies that favor growth over the

internal development of new products and

R&D because of the longer time necessary to

obtain gains” (Anokhin et al., 2016: 4746)

Rind (1981)

Anokhin et al.

(2016)

Guo et al. (2019)

Legitimacy to champion CVC vs. focus on the

core based on peer rm performance or

behavior

•“proximity [to CVC adopters] facilitates

‘sensemaking’ within communities of

practice, fuels pressures for mimetic

adoption” (Gaba and Meyer, 2008: 984)

Gaba and Meyer

(2008)

Gaba and

Bhattacharya

(2012)

Gaba and Dokko

(2016)

Titus et al. (2020)

CVC as a complementary and

essential tool vs. a disruptive and

risky tool (Internal stakeholder

perspective)

CVC as a risky tool vs. a long-term innovation

tool helping satisfy stakeholders for senior

managers

•“These management teams nd themselves

weighing the potential gains and losses of

exploring versus maintaining the status quo,

particularly in terms of risks to their own

employment and compensation […] Top

managers may be inclined to avoid risk

associated with the search for new

technologies, potential acquisitions, or

investing in complementary businesses […]

However, in a fast changing environment, the

slightest delay in seeking out emerging

technologies can negatively affect market

return in the long run, displeasing

stakeholders.” (Sahaym et al., 2016: 1216)

Bleicher and Paul

(1987)

Biniari et al.

(2015)

Anokhin et al.

(2016)

Sahaym et al.

(2016)

Titus and

Anderson (2018)

CVC as a tool for exploration vs. a costly

noncore activity that disrupts BUs’

exploitation

•“BUs are usually managed for efciency that

may not allow them to look beyond their

existing business logic. We found that BUs,

which focused on their established business

logic, often viewed CVC as a waste of time

and money” (Keil et al., 2008a: 1496)

Winters and

Murn (1988)

Keil et al. (2008a)

Basu and Wadhwa

(2013)

CVC as a complementary vs. substitutive tool

for internal R&D

•“Firms are required to strategically allocate

their innovation spending between

Dushnitsky and

Lenox (2005a)

(continued on next page)

E. Jeon and M. Maula

Journal of Business Venturing 37 (2022) 106226

Table 2 (continued )

Aggregate dimensions 2

order themes 1

order concepts Illustrative quotes Representative

studies

traditional R&D and external channels such

as CVC. The arguments for CVC, predicated

on the value of explorative knowledge and

exibility, can be extended to further predict

that rms will explicitly shift funds from

internal R&D to CVC as a response to

competition” (Kim et al., 2016: 265)

•“Because creating a CVC unit reallocates

internal resources (to identify and integrate

externally generated technologies), internal

R&D and business units may resist such

initiatives” (Gaba and Bhattacharya, 2012:

181)

•“Industry R&D investments create a capacity

within the industry to identify and exploit

technology from CVC targets” (Sahaym et al.,

2010: 376)

Covin and Miles

(2007)

Fulghieri and

Sevilir (2009)

Sahaym et al.

(2010)

Gaba and

Bhattacharya

(2012)

Kim et al. (2016)

Ma (2019)

CVC as a complementary vs. substitutive tool

for corporate development

•“Managers should take into account the

potential trade-offs between CVC, alliances,

and perhaps other types of interrm re-

lationships when seeking to internalize re-

sources owned by other rms or to leverage

their own rms’ internal resources.” (Dush-

nitsky and Lavie, 2010: 41)

•“Both CVC investments and technology

alliances are mechanisms designed for

exploration of knowledge with a focus on

emerging technologies…Despite the benets

they can bring, geographically diversied

portfolios that combine technology alliances

with CVC investments may lead rms to face

resource constraints and increased

complexity of knowledge-sourcing that are

likely to hamper effective learning.” (Belder-

bos et al., 2018: 24)

Schildt et al.

(2005)

Colombo et al.

(2006)

Keil et al. (2008b)

Benson and

Ziedonis (2009)

Van de Vrande

et al. (2009)

Yang et al. (2009)

Benson and

Ziedonis (2010)

Dushnitsky and

Lavie (2010)

Basu et al. (2011)

Tong and Li (2011)

Van de Vrande

et al. (2011)

Van de Vrande

(2013)

Van de Vrande and

Vanhaverbeke

(2013)

Belderbos et al.

(2018)

Ceccagnoli et al.

(2018)

CVC as part of a corporate

parent vs. a VC/

startup community

(CVC program)

VC capabilities and networks vs.

corporate capabilities and networks

(CVC program perspective)

Legitimacy within the corporation vs. in the

startup/VC community

•“CVC organizing practices can be explained

by competing institutional forces from their

two environments” (Souitaris et al., 2012:

501)

Keil et al. (2008a)

Hill et al. (2009)

Weber and Weber

(2011)

Souitaris et al.

(2012)

Souitaris and

Zerbinati (2014)

Biniari et al.

(2015)

(continued on next page)

E. Jeon and M. Maula

Journal of Business Venturing 37 (2022) 106226

Table 2 (continued )

Aggregate dimensions 2

order themes 1

order concepts Illustrative quotes Representative

studies

Recruiting VC professionals vs. corporate

executives and R&D professionals in the CVC

program

•“CVC managers with career experience in

IVCs should be oriented toward nancial

goals, as they are both knowledgeable about

how to attain nancial goals and conditioned

to value those goals” (Dokko and Gaba, 2012:

567)

•“Internally hired CVC managers should be

more likely to modify practices to t an

adopting organization. Understanding a CVC

unit’s genesis and how it relates to the

corporation’s overall business strategy,

culture, and existing power structures will

lead these managers to customize the goal

orientation and operational strategies of their

CVC unit… they are more likely to modify

investment goals to be oriented toward

strategic goals instead of nancial goals”

(Dokko and Gaba, 2012: 568)

Rind (1981)

Winters and

Murn (1988)

Keil et al. (2008a)

Dokko and Gaba

(2012)

Souitaris et al.

(2012)

Gaba and Dokko

(2016)

VC rules of the game vs. corporate

policies and structures

(CVC program perspective)

VC compensation with carried interest vs.

corporate salary policies

•“Frictions that arise when the logic of

entrepreneurial nance [high-powered VC

compensation scheme] meets organizational

reality” (Dushnitsky and Shapira, 2010:

1009–1010)

•“While the potential outcomes of the VC

model [e.g., adoption of high-powered in-

centives] are attractive to corporate

venturing units, the model’s application to

the corporate context creates some major

challenges” (Hill et al., 2009: 5)

Rind (1981)

Sykes (1986)

Siegel et al. (1988)

Dushnitsky and

Shapira (2010)

Hill et al. (2009)

CVC program autonomy vs. parent rm

control and integration

•“Autonomous governance should allow CV

unit executives to better manage the potential

tensions and conicts of interest […] between

themselves and their corporate parent.

Indeed, CV units need to be able to ignore

short-run performance demands, to act on

speculative opportunities when identied,

and to manage, rather than avoid, high levels

of risk” (Hill et al., 2009: 8)

•“An autonomous CVC’s free investment

activities and diverse portfolio can be helpful

for exploring new technology areas. On the

other hand, in exploitation aiming at

enhancing the existing business of the parent

company, autonomous CVCs may have a

Rind (1981)

Bleicher and Paul

(1987)

Siegel et al. (1988)

Keil (2004)

Weber and Weber

(2005)

Hill et al. (2009)

Lee et al. (2018)

(continued on next page)

E. Jeon and M. Maula

Journal of Business Venturing 37 (2022) 106226

Table 2 (continued )

Aggregate dimensions 2

order themes 1

order concepts Illustrative quotes Representative

studies

negative impact, as they are disconnected

from the expertise of the parent company and

its accumulated technological knowledge and

network resources.” (Lee et al., 2018: 142)

•“The most important obstacle related to the

venture activity itself is […] the lack of

authority to make independent decision, the

inability of corporations to attract qualied

venture managers, and a pervasive concern

by entrepreneurs that their ventures will be

subverted to satisfy the corporation’s

objectives. Once again, the responses reect

frustration with the inability to make

decisions without corporate interference, and

an inability for the corporation to understand

even as it is interfering” (Siegel et al., 1988:

239)

CVC as a threat vs. an

opportunity (VC/

startup)

CVC as a value-adding investor vs. a

risk of misappropriation (Startup

perspective)

Corporations can add value to portfolio

companies through their R&D resources,

manufacturing capability, distribution

channels, and brand vs. misappropriate the

intellectual property of the edgling portfolio

companies

•“This tension between very attractive

resources and high misappropriation risks is

what we term the ‘sharks dilemma.’” (Katila

et al., 2008: 296)

•“We nd that start-up stage entrepreneurs

who operate in the same industry and who are

ideal targets of such CVC investment, are less

likely to seek CVC backing. We refer to this as

the paradox of corporate venture capital.”

(Dushnitsky and Shaver, 2009: 1059)

•“While the contribution of CVC to rm

innovative output is directly related to the

quality of the funded ventures, high-quality

ventures may shun corporate investors in

order to prevent leakage of their valuable

knowledge (especially in weak IP regimes)”

(Dushnitsky and Lenox, 2005a: 950)

•“Entrepreneurs can distrust corporate

investors because they will control their

ventures to satisfy corporate objectives at the

expense of the ventures’ well being”

(Hellmann (2002) citing Block and

MacMillan (1993))

Hellmann (2002)

Maula et al.

(2003)

Maula et al.

(2005)

Dushnitsky and

Lenox (2005a)

Dushnitsky and

Lenox (2005b)

Zu Knyphausen-

Aufse (2005)

Bottazzi et al.

(2008)

Katila et al. (2008)

Dushnitsky and

Shaver (2009)

Masulis and

Nahata (2009)

Maula et al.

(2009)

Ivanov and Xie

(2010)

Weber and Weber

(2011)

Park and Steensma

(2012)

Bertoni et al.

(2013)

Chemmanur et al.

(2014)

Hallen et al. (2014)

Guo et al. (2015)

Alvarez-Garrido

and Dushnitsky

(2016)

Colombo and Sha

(2016)

Weber et al. (2016)

Colombo and

Murtinu (2017)

Georgallis and

Durand (2017)

Maas et al. (2020)

Kim et al. (2019)

Uzuegbunam et al.

(2019)

(continued on next page)

E. Jeon and M. Maula

Journal of Business Venturing 37 (2022) 106226

Table 2 (continued )

Aggregate dimensions 2

order themes 1

order concepts Illustrative quotes Representative

studies

CVC as a value-adding coinvestor vs.

a bureaucratic and opportunistic

coinvestor (VC perspective)

Corporations can be valuable coinvestors

bringing complementary resources and

capabilities to the syndicates vs. they can be

slow, bureaucratic, and opportunistic

•“There can be a CVC–VC conict of interest

over a start-up’s optimal development

strategy. A CVC may oppose promising

product development in areas that directly

compete with the CVC’s parent and support

development of less protable products that

complement the CVC parent’s products or

services. A CVC parent can also use its

knowledge about a start-up’s technology,

products and services to develop competitive

products and services of its own at the start-

up’s expense.” (Masulis and Nahata, 2009:

603)

•“CVC conicts with VCs can also be rooted in

disagreement over the optimal exit strategy,

which can have an adverse nancial impact

on VC investments. For example, CVCs can

support early acquisitions that accelerate the

commercialization of a start-up’s

complementary products and services at the

cost of lower acquisition prices.” (Masulis and

Nahata, 2009: 603)

•“Syndication might have a benecial effect on

portfolio rms’ performance, because it

allows the combination of the nancial and

nonnancial resources of syndicate members

and closer monitoring of portfolio rms.

However, syndication also entails agency and

transaction costs […] syndicate members

may ‘have different objectives which can

result in principal–principal conicts of

interests among members of a VC syndicate.’

Because IVCs and CVCs often have different

objectives, these conicts are likely in mixed

IVC-CVC syndicates.” (Colombo and Murtinu,

2017: 40)

Masulis and

Nahata (2009)

Keil et al. (2010)

Park and Steensma

(2013)

Colombo and

Murtinu (2017)

Galloway et al.

(2017)

E. Jeon and M. Maula

Journal of Business Venturing 37 (2022) 106226

Aggregate

dimension

2nd order theme

1st order concept

82~

91~

CVC-based

exploration vs.

core business-

focused

exploitation

(Multiple

stakeholders)

CVC as a strategic and financial tool vs. a

risky and costly tool

(corporate perspective)

How is CVC justified

When is CVC justified

Pressure to adopt CVC for long-term

innovation and growth vs. abandon CVC to

achieve short-term profitability (external

stakeholder perspective)

Shareholder

Peer firm

CVC as a complementary and essential tool

vs. a disruptive and risky tool

(internal stakeholder perspective)

Senior manager

R&D

Corp Dev.

CVC as part of

a corporate

parent vs. a

VC/startup

community

(CVC program)

VC capabilities and networks vs.

corporate capabilities and networks

(CVC program perspective)

Legitimacy

Staffing

VC rules o f the game vs.

corporate policies and structures

(CVC program perspective)

Incentive

Autonomy

CVC as a threat

vs. an

opportunity

(Startup/VC

community)

CVC as a value-adding investor

vs. risk of misappropriation

(startup perspective)

Sharks dilemma

CVC as a value-adding coinvestor vs. a

bureaucratic and opportunistic coinvestor

(VC perspective)

CVC as coinvestor

Total (N)

162

Percentage (%)

*A darker shade corresponds to a higher frequency, whereas a lighter shade refers to a lower frequency. The numbers correspond to the freq uency of the first-ord er tension for each year.

Fig. 3. Evolution of the CVC tension literature

*A darker shade corresponds to a higher frequency, whereas a lighter shade refers to a lower frequency. The numbers correspond to the frequency of the rst-order tension for each year.

E. Jeon and M. Maula

Journal of Business Venturing 37 (2022) 106226

2016; Gaba and Meyer, 2008; Titus et al., 2020). Taking a diffusion theory perspective, Gaba and Dokko (2016) and Gaba and Meyer

(2008) suggested that while CVC is perceived to be risky and difcult to implement, it can be legitimized as a strategic tool when peer

rms adopt it and lead to imitation. Similarly, taking a behavioral theory of the rm perspective, Gaba and Bhattacharya (2012) found

that rms adopt or abandon CVC programs based on their innovation performance relative to the performance of benchmarked peer

rms. In short, the behavior or performance of peer rms affects legitimacy and thus the pressure to adopt CVC for long-term inno-

vation and growth vs. abandon CVC to achieve short-term protability.

More recently, another stream of literature has begun to consider shareholders’ and nancial analysts’ pressure on managers to

adopt CVC for long-term innovation and growth vs. abandon CVC to achieve short-term protability (Anokhin et al., 2016; Guo et al.,

2019). Anokhin et al. (2016) found that institutional shareholders put pressure on parent corporation management to achieve short-

term quarterly earnings by focusing on core business activities and reducing CVC, which is perceived as a long-term innovation tool

that brings strategic benet but does not affect short-term nancial returns. Guo et al. (2019) found that in addition to pressuring

managers to achieve short-term nancial returns, nancial analysts efciently communicate information on the innovation value of

the rm to the market and thus promote CVC activity.

The “pressure to adopt CVC for long-term innovation and growth vs. abandon CVC to achieve short-term protability” second-order

tension accounts for a very small fraction of the research on CVC tensions (4%), which suggests that it has been largely overlooked

(refer to Fig. 3). The research has not yet considered how to manage and cope with this tension.

5.1.3. CVC as a complementary and essential tool vs. a disruptive and risky tool (internal stakeholder perspective)

The CVC literature has recognized that various internal stakeholders such as senior managers, BUs, R&D units, or alliance and

acquisition units perceive “CVC as a complementary and essential tool vs. a disruptive and risky tool.” In the last two decades, most

studies have focused on the functional roles of alliances, acquisitions, or internal R&D with respect to CVC, whereas more recently, an

emerging stream of studies has considered the roles of BUs and the tensions faced by senior managers. First, the literature has examined

the tension on “CVC as a complementary vs. substitutive tool for corporate development.” The literature has noted that while alter-

native corporate development tools (e.g., licensing, alliances, acquisitions) require a high level of irreversible commitments but result

in immediate competitive actions, CVC provides exibility but has strategic benets only in the long term (e.g., Van de Vrande et al.,

2009). Assuming a substitutive relationship, a stream of literature has taken a real options perspective and found that CVCs are

preferred over alternative corporate development tools under an increased level of uncertainty or technological change (Basu et al.,

2011; Ceccagnoli et al., 2018; Tong and Li, 2011; Van de Vrande and Vanhaverbeke, 2013; Van de Vrande et al., 2009). Other streams

of research have suggested a conditional complementary relationship between strategic alliances and CVCs (e.g., Belderbos et al.,

2018; Colombo et al., 2006; Dushnitsky and Lavie, 2010), for example, because alliances provide resource complementarity and

facilitate network resource visibility up to a certain limit (Dushnitsky and Lavie, 2010). Concerning the relationship between CVCs and

acquisitions, Benson and Ziedonis (2009) found that learning and information gained from CVCs help corporate investors improve the

performance of acquiring non-portfolio startups at a diminishing rate, which suggests conditional complementarity, whereas Benson

and Ziedonis (2010) found that shareholder value is destroyed when corporate investors acquire their own portfolio startups, which

suggests substitution.

Second, the literature has considered the tension on “CVC as a complementary vs. substitutive tool for internal R&D” on producing

innovation outcomes. Taking a complementary perspective, one strand of this literature has suggested that internal R&D helps

corporate investors not only absorb knowledge from their portfolio companies but also search, identify, and exploit future opportu-

nities for knowledge sourcing and thus complements CVC programs (Covin and Miles, 2007; Dushnitsky and Lenox, 2005a; Gaba and

Bhattacharya, 2012; Ma, 2019; Sahaym et al., 2010). Taking a substitutive perspective, another strand of this literature has found that

CVC partially replaces internal R&D when a rm faces competition because CVC has advantages relative to internal R&D by speeding

up product innovation, providing stronger incentives for portfolio companies to innovate based on arm’s length investment re-

lationships, and keeping portfolio companies out of the hands of their competitors (Fulghieri and Sevilir, 2009; Kim et al., 2016).

Third, while CVC has often been seen as an effective vehicle for the exploration of future technological opportunities (Maula et al.,

2013; Schildt et al., 2005; Van de Vrande et al., 2011), it has also been occasionally considered a costly noncore activity that distracts

BUs’ exploitation efforts (Keil et al., 2008a; Winters and Murn, 1988). For example, Keil et al. (2008a) found that because of their

established business logic, BUs may lack the cognitive capability to recognize the practical implications of a portfolio company’s

technology, which can hamper the process of knowledge sourcing. In contrast, Basu and Wadhwa (2013) suggested that the CVC

program’s exploration does not disrupt BUs’ exploitation efforts because CVC is mandated to ll in the deciencies of BUs, requires

relatively low resource commitment, and needs support from mainstream BUs to justify its existence.

Fourth, most recently, the literature has noted that senior managers face tensions in viewing “CVC as a risky investment vs. a long-

term innovation tool to help satisfy stakeholders” (e.g., Anokhin et al., 2016; Sahaym et al., 2016). On the one hand, in the short term,

CVC is a risky tool that poses a high risk to senior managers’ employment and compensation. On the other hand, in the long term, CVC

is a necessary innovation tool that serves stakeholders’ needs by sourcing emerging technologies that will become highly disruptive

and protable when existing technologies become obsolete (refer to Table 2 for a sample quote).

The second-order tension on “CVC as a complementary and essential tool vs. a disruptive and risky tool” for various internal

stakeholders has been developing in the last decade and accounts for 16% of all CVC tensions (see Fig. 3). The literature has suggested

that this tension can be managed by taking the following approaches. First, the tension can be managed by CVC programs com-

plementing the internal stakeholders. These tension management strategies include CVC programs avoiding taking a competitive

posture with other organizational units (e.g., emphasizing small size and low power, not investing in substitutes for internal tech-

nologies) (Basu et al., 2016a; Basu and Wadhwa, 2013); CVC programs simultaneously building new capabilities for the corporate

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Journal of Business Venturing 37 (2022) 106226

parent and helping leverage existing capabilities (i.e., pursuing ambidexterity) (Hill and Birkinshaw, 2014); CVC programs employing

CVC agents who are socially embedded in both startups and BUs and who can translate knowledge between the two worlds to break

down cognitive barriers between BUs’ established and startups’ new cognitive frameworks (Keil et al., 2008a).

Second, the literature has suggested that the tension can be managed by setting up structures and incentives that help internal

stakeholders and CVC programs cooperate as follows: corporations setting up a formal subsidiary dedicated to CVC to let internal

stakeholders know that they are committed to CVC (Winters and Murn, 1988); corporate decision-makers aligning internal stake-

holders’ incentive structures to enable them to be involved in and support CVC decision-making processes (e.g., due diligence, liaison,

investment charter, overseeing investment decisions) (Bleicher and Paul, 1987; Weber and Weber, 2011; Winters and Murn, 1988);

the CEO and top management team making long-term commitments to CVC programs to enable the programs to be embedded in the

organization and adapt to internal resistance (Bleicher and Paul, 1987); CVC programs learning how to handle relations with corporate

decision-makers (Siegel et al., 1988).

5.2. CVC as part of a parent corporation vs. a startup/VC community (CVC program)

CVC programs face the tension of belonging to the corporate parent vs. the startup/VC community. Souitaris et al. (2012: 479)

recognized this contradictory institutional pressure by noting that “since the CVCs belong simultaneously to two uncoordinated en-

vironments [their parent and the VC industry], the competing forces are unlikely to eventually resolve…” This tension results from the

role of CVC programs as “knowledge brokers” that source external knowledge from the startup/VC communities to the corporate

parents (Keil et al., 2008a; Weber and Weber, 2011). This tension has implications for the conguration of CVC programs (Biniari et al.,

2015), with many studies considering whether and when CVC programs should draw from the capabilities and networks of the parent

corporation or the VC/startup community and whether and when they should follow the policies and structures of the corporate parent

or the VC/startup world. Both streams of literature developed sparsely in the 1980s but have gained momentum since 2008, with many

new studies focusing on these tensions. Among the three main tensions, this tension is the least studied, accounting for 14% of all CVC

tensions (see Fig. 3).

5.2.1. VC capabilities and networks vs. corporate capabilities and networks (CVC program perspective)

As a CVC program has to belong to both the parent corporation and the startup/VC community to be viable, the capabilities and

networks of the individuals working in the CVC program are rarely ideally suited for both worlds, and the composition of the CVC team

must be carefully considered to ensure that it performs well in both worlds. A stream of literature has discussed the tensions faced by

CVC programs when drawing on capabilities and networks from corporate parents (i.e., internal hires) vs. VC/startup communities (i.

e., external hires) (e.g., Dokko and Gaba, 2012; Souitaris et al., 2012). CVC programs face a trade-off in such a choice because internal

hires have a deeper understanding of the parent rm’s strategy and can collaborate and coordinate with other units based on their pre-

existing social ties (i.e., rm-specic experience) (Gaba and Dokko, 2016). By comparison, external hires from VCs/startups have a

deeper understanding of the VC market, are more skilled in making and managing VC investments, and are better networked within the

VC/startup community (i.e., job-specic experience) (Gaba and Dokko, 2016).

This second-order tension accounts for 7% of all CVC tensions (refer to Fig. 3). The literature has suggested that this tension can be

managed by CVC programs recruiting boundary-spanning CVC managers who can interface investment opportunities with corporate

strategy (e.g., recruiting members with high internal social capital, strong functional experience, or network endorsement) (Keil et al.,

2008a; Winters and Murn, 1988), by CVC programs combining internal and external hires because their various backgrounds and

experience can help CVC programs broker knowledge between the VC/startup community and the corporate parent (Keil et al., 2008a;

Rind, 1981), or by corporate decision-makers structuring CVC programs to follow either the norms of the VC world or the corporate

parent and respectively adopt either an organic or a mechanistic organizational structure (Dokko and Gaba, 2012; Gaba and Dokko,

2016; Souitaris et al., 2012).

5.2.2. VC rules of the game vs. corporate policies and structures (CVC program perspective)

Another tension arises from the contradictory practices of CVC programs following corporate policies and structures versus playing

by the VC rules of the game (e.g., Dushnitsky and Shapira, 2010; Hill et al., 2009). For instance, one stream of literature has examined

the tension arising from compensating CVC managers based on the high-powered nancial incentives that are common in the VC

industry (e.g., ‘carried interest’, a share of the fund prots) versus a generic corporate compensation scheme. Studies have explicitly

recognized this tension by suggesting that although adopting VC incentive schemes can motivate CVC managers to invest in protable

yet risky startups and increase rm performance, these schemes face parent rm institutional constraints and resistance from other

organizational units due to the lack of equity, and they can motivate CVC managers to overly focus on nancial returns instead of

strategic benets (Dushnitsky and Shapira, 2010; Hill et al., 2009). In contrast, studies have suggested that following a generic

corporate compensation scheme enhances the sense of internal equity within the corporation, helps the CVC program gain support

from other organizational units, and simplies the administrative process, thereby contributing to achieving strategic benets (e.g.,

Dushnitsky and Shapira, 2010; Hill et al., 2009).

Another stream of CVC research relates to the tension arising from the choice between allowing CVC program managers to be

autonomous versus senior managers exerting control over decisions related to CVC. Although autonomy can promote exibility,

innovative thinking, and seizing entrepreneurial opportunities, it can backre by inducing managers to engage in opportunism and a

fragmented implementation of organizational goals, which increases the need to control managerial behavior by monitoring and

intervening (e.g., Hill et al., 2009; Shimizu, 2012). Rather than examining the tension arising between CVC and senior managers with

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Journal of Business Venturing 37 (2022) 106226

regard to autonomy versus control, this stream of literature has generally focused on the benets or drawbacks of CVC autonomy. Early

studies found that autonomy helps CVC managers make exible and speedy investment decisions without corporate interference when

faced with a rapidly changing business environment, leading to a higher return on investment (Rind, 1981). Later, studies found that

CVC program autonomy leads to increased learning by enabling the program to attract talented external hires, to make investment

decisions not subject to a short-term corporate agenda, and to carry out exploration (Keil, 2004; Lee et al., 2018). At the same time,

such autonomy can backre by resulting in less exploitation because of the difculty in accessing the corporate parents’ resources (Lee

et al., 2018).

This second-order tension accounts for 7% of all CVC tensions. In the past decade, only two studies have focused on this tension. In

particular, the literature has been silent on how to manage tensions on “high-powered incentives vs. generic corporate compensation”

or “autonomy vs. control.” This literature has mostly taken a one-sided perspective, suggesting that emulating VC compensation and

decision-making would lead to better performance, leaving out discussions related to following the norms and practices of the

corporate parent.

5.3. CVC as a threat vs. an opportunity (startup/VC community)

As a CVC program makes and manages CVC investments, it interacts with the startup/VC community. Because corporate investors

often pursue strategic returns and can be opportunistic, stakeholders in the startup/VC community often perceive them as a threat,

while at the same time, corporate investors can offer valuable corporate resources that are perceived as an opportunity (e.g., Katila

et al., 2008). By taking the startup perspective, over the past two decades, one stream of literature has extensively examined the

tension between the provision of valuable resources by corporate investors (i.e., opportunity) versus the escalated misappropriation

risk that startups might face (i.e., threat) in the CVC investment relationship (e.g., Hallen et al., 2014; Katila et al., 2008). In the past

decade, by taking the VC perspective, another stream of literature has discussed the tension between CVCs being perceived as value-

adding coinvestors (i.e., opportunity) versus opportunistic coinvestors (i.e., threat) (Keil et al., 2010; Masulis and Nahata, 2009).

Among the three main tensions, this tension is the second most studied, accounting for 31% of all CVC tensions (see Fig. 3).

5.3.1. CVC as a value-adding investor vs. risk of misappropriation (startup perspective)

When raising funding from corporate investors, startups face the tension concerning accessing attractive corporate resources, such

as nancing, complementary assets, and endorsements, versus being exposed to misappropriation risk because one of the common

goals of CVC is technological learning, which could result in the misappropriation of the intellectual property rights (IPRs) of startups

(e.g., Hallen et al., 2014; Katila et al., 2008). Katila et al. (2008: 296) called this “tension between very attractive resources [provided

by corporate investors] and high misappropriation risks [also posed by corporate investors]” the “sharks dilemma.”

Initially, this stream of research implicitly assumed that corporate investors have stronger bargaining power in the investment tie

formation process when the benets of accessing corporate investors’ resources outweigh the costs of misappropriation faced by

startups (Dushnitsky and Lenox, 2005a; Dushnitsky and Lenox, 2005b). Subsequent studies began to acknowledge that startups can

also have bargaining power. For instance, Dushnitsky and Shaver (2009) found that tie formation between CVC investors and startups

increases when there is a strong IPP regime and great industry overlap but decreases under a weak IPP regime with great industry

overlap. Dushnitsky and Shaver (2009: 1046) concluded that the more likely corporations are to learn about portfolio companies’

novel and potentially substituting inventions through CVC, the less such entrepreneurs are likely to seek CVC backing from them.

These scholars labeled this tension the “paradox of corporate venture capital.”

This tension on “CVC as a value-adding investor vs. risk of misappropriation” is the second most studied second-order tension in the

CVC literature, accounting for 26% of all CVC tensions (see Fig. 3). The research has examined how startups can manage this tension by

setting up various defense mechanisms, including enforcing trade secrets, accepting later-stage funding, limiting corporate investors’

ownership stakes and board seats (Colombo and Sha, 2016; Katila et al., 2008; Masulis and Nahata, 2009; Maula et al., 2009), and

obtaining investments from central or reputable VCs prior to accepting CVC investments (Colombo and Sha, 2016; Hallen et al., 2014;

Hellmann, 2002; Katila et al., 2008; Masulis and Nahata, 2009; Maula et al., 2009). Additionally, the research has found that startups

can be more aware of the opportunistic tendency of corporate investors if they have established social ties at the individual level with

corporate investors (Kim et al., 2019).

Because of the sharks dilemma, corporate investors can face a tension between learning new technologies from startups and staying

attractive to potential portfolio startups (Hallen et al., 2014). Extensive research has suggested that corporate investors can manage

this tension by taking the following approaches. First, attractive corporate resources can be provided; to gain access to high-quality

deal ow, CVC programs can provide attractive complementary value-added services to portfolio companies (Maula et al., 2005);

CVC programs can build reputations and endorse their portfolio companies by networking with top-tier independent VCs, making

indirect investments in various VC funds, joining industry associations, and recruiting experienced external VC/startup personnel to

the CVC program (Braune et al., 2021; Hill et al., 2009; Keil et al., 2010; Wadhwa and Basu, 2013).

Second, effective structures can be set up; corporations can set up formal CVC subsidiaries to signal a long-term commitment to CVC

Katila et al. (2008) assumed that the “sharks dilemma” occurs during the corporate investor-startup tie formation decision. While we use the

same terminology, “sharks dilemma,” as coined in the literature, we propose that this tension between attractive resource provision and misap-

propriation risk faced by startups should be understood as an ongoing “paradoxical tension” that persists even after the investment tie is formed with

the CVC investors and that must be managed over time.

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Journal of Business Venturing 37 (2022) 106226

and to relieve the misappropriation concerns of entrepreneurs (Winters and Murn, 1988); corporations can set up separate organi-

zational units, in which one unit nurtures portfolio companies and the other unit takes care of strategic benets (Rind, 1981); CVC

programs can reduce deal complexity by responding quickly to investment opportunities (Winters and Murn, 1988), closing the deal

faster, and reducing the terms and conditions (Basu et al., 2016a).

Third, collaborative tools and channels can be set up and managed between corporate investors and startups. CVC programs can

develop collaborative blueprints with startups by creating business agreements during investments and nominating relevant personnel

as board observers (Basu et al., 2016a; Sykes, 1990; Wadhwa and Basu, 2013); CVC programs can communicate about needs and

interests with portfolio companies and build long-term relationships (Sykes, 1990); CVC programs can develop relation-specic assets

and knowledge-sharing routines with portfolio companies (Weber et al., 2016; Weber and Weber, 2011).

Fourth, CVC programs can protect portfolio companies’ interests by safeguarding startup’s IP, avoiding competing investments of

the portfolio company (Basu et al., 2016a), investing in startups with sufcient resource complementarities (Hellmann, 2002; Maula

et al., 2009; Riyanto and Schwienbacher, 2006), and focusing on market-level learning from the aggregate deal ow by syndicating

with high-status VCs rather than learning specic technologies from the corporate investor’s own portfolio companies (Maula et al.,

2013). The literature on how to manage this tension has developed primarily by taking a corporate investor perspective, with relatively

few studies taking a startup perspective.

5.3.2. CVC as a value-adding coinvestor vs. a bureaucratic and opportunistic coinvestor (VC perspective)

In the past decade, a stream of literature taking the VC perspective has noted that a corporate investor can be perceived as a

valuable coinvestor who brings complementary resources and capabilities into the syndication (i.e., opportunity). However, corporate

investors can pose a threat by pursuing strategic benets and being slow and bureaucratic and, thus, can conict with the VCs’ goals of

increasing nancial returns (Keil et al., 2010; Masulis and Nahata, 2009; Paik and Woo, 2017; Park and Steensma, 2013). The research

on this tension is quite recent and understudied, accounting for 5% of all CVC tensions (see Fig. 3).

The literature has examined how corporate investors can manage such tensions when syndicating with VCs by acquiring central

positions in VC syndication networks, providing access to unique corporate resources, and making greater R&D or CVC investments

(Keil et al., 2010); CVC programs building reputations by joining industry associations, coinvesting with other VCs, and recruiting

experienced external VC/startup personnel to the CVC programs (Rind, 1981); corporate decision-makers formulating investment

charters to ensure that the intentions of CVCs and VCs are clearly understood in a syndicated investment (Bleicher and Paul, 1987); and

corporations setting up formal CVC subsidiaries that signal the corporations’ long-term commitment to CVC and their ability to

respond quickly to investment opportunities with minimal bureaucracy and that help them become accepted within the VC community

(Winters and Murn, 1988).

6. Discussion

6.1. Summary

Given the competing goals in CVC (e.g., strategic and nancial objectives) and multiple stakeholders’ expectations, CVC is a

complex phenomenon that is rife with tensions. In this paper, we have reviewed the progress made in the CVC literature toward

understanding these tensions in CVC over the past four decades. Through this systematic review, we identied a large number of

tensions examined in the literature, which we further distilled into three main tensions: (1) CVC-based exploration vs. core business-

focused exploitation (multiple stakeholders), (2) CVC as part of a parent corporation vs. a startup/VC community (CVC program), and

(3) CVC as a threat vs. an opportunity (startup/VC community). We further reviewed the literature on how these tensions can be

managed.

In terms of the research progress in the literature (refer to Fig. 3), we found that the early literature highlighted the promise and

problems of CVC as a strategic exploration tool for corporations, with the justication for CVC activity from the corporate perspective

often being questioned (e.g., Rind, 1981). This healthy skepticism toward CVC was evidenced by the cyclical and spotty track record of

early CVC programs. Nevertheless, a large volume of CVC research has continued to focus on the potential strategic and nancial

benets of CVC, building an evidence-based foundation for championing CVC.

Subsequently, because of an increased understanding of CVC programs, these programs have become more successful (Souitaris

and Zerbinati, 2014), and the focus in the CVC literature has shifted, at least partially, from the tensions stemming from “CVC-based

exploration vs. core business-focused exploitation” to when such tensions become salient or latent and inuence CVC investing de-

cisions. Furthermore, the research has increasingly focused on the perspectives of external stakeholders such as portfolio startups,

independent VCs, peer corporations, shareholders, and nancial analysts, and internal stakeholders such as senior managers, BUs,

R&D units, and other corporate development units (e.g., alliance and acquisition units). With this shifting attention, the development

of new theories, and the availability of additional data sources, our understanding has rapidly evolved with regard to the identity and

behavior of CVC programs in the complex interfaces between the corporate parent vs. startup/VC worlds as well as the potential

opportunities vs. threats posed by CVC programs to startups and coinvestors. We expect that this developing literature will help further

our understanding of many different types of tensions and how to manage or cope with such tensions. Nevertheless, the complexity of

the CVC phenomenon, the changing operating environment, and the application of a paradox lens guarantee that there will be

important opportunities for future research on CVC to enrich our understanding of the many identied tensions, to explore heretofore

unidentied tensions, and to contribute to the theoretical understanding of paradoxical tensions in organizational phenomena. Next,

by drawing on the paradox literature, we rst discuss the paradoxical nature of the main tensions in CVC and then propose avenues for

E. Jeon and M. Maula

Journal of Business Venturing 37 (2022) 106226

future research.

6.2. Evaluation of the main tensions in CVC as paradoxes

Our review shows that the literature on tensions in CVC has largely focused on the “contradictory” characteristics of the main

tensions in CVC and how the tensions can be managed. This approach limits our understanding of why, how, and when contradictory

goals and multiple stakeholder expectations result in tensions and how these tensions inuence the behavior of stakeholders and the

performance of CVC as well as how they can be managed to produce positive outcomes. We suggest that adopting a paradox

perspective can be benecial in deepening our understanding of these tensions (Schad et al., 2016).

According to the paradox perspective, a tension can be understood as a paradox when it meets the four criteria of a para-

dox—contradictory, interdependent, simultaneous, and persistent (Andriopoulos and Gotsi, 2017). A tension is contradictory when it

has opposing elements (e.g., goals, interests, perspectives, identities, etc.). For instance, exploration and exploitation have opposing

routines, structures, and cultures (e.g., Smith and Tushman, 2005). A tension is interdependent when element A and element B are

related to each other. For example, exploration and exploitation are interdependent when exploration becomes the input of exploi-

tation and vice versa or when exploration and exploitation jointly inuence rm performance (e.g., Lavie et al., 2010). A tension is

simultaneous when the opposing elements exist at the same time. A tension is persistent when the opposing elements persist over time.

Here, we discuss how the main tensions in CVC meet the four criteria of a paradox and propose to understand these tensions as

paradoxical tensions (Schad et al., 2016).

6.2.1. The paradoxical nature of the “CVC-based exploration vs. core business-focused exploitation” tension

The literature on this tension has focused on the “contradictory” perspectives of championing CVC-based exploration vs. core

business-focused exploitation. These studies have taken the perspectives of multiple decision-makers who allocate corporate resources

to a CVC program versus core business activities. Although none of these CVC studies have adopted the paradox theory or explicitly

identied all paradoxical elements, such elements can nevertheless be found in the literature. For instance, the contradictory per-

spectives are “interdependent” because according to the logic of ambidexterity, synergy is created when CVC investing is championed

to explore and the core business activity is emphasized to exploit, and both are needed to achieve long-term rm performance and

survival (Hill and Birkinshaw, 2014). These contradictory perspectives exist “simultaneously” to pursue innovations through CVC-

based exploration and to increase efciency by focusing on exploitation through core business activities (Hill and Birkinshaw,

2014). The need to increase exploration by championing CVC investments and to improve efciency by focusing on the exploitation of

core businesses is “persistent”; therefore, the tension cannot generally be solved easily, at least for the long term, as evidenced by the

observed cyclicality of CVCs (e.g., Allen and Hevert, 2007; Da Gbadji et al., 2015; Ma, 2019). Although it has not yet been studied using

the paradox perspective, we suggest that the “CVC-based exploration vs. core business-focused exploitation” tension has all the key

elements of a paradox and can be understood as one.

6.2.2. The paradoxical nature of “CVC as part of a corporate parent vs. a startup/VC community” tension

The literature on this tension has mainly considered the “contradictory” institutional pressures faced by a CVC program when it is

part of a parent corporation, adopts its norms, capabilities/networks, and policies/structures versus when it is part of the VC/startup

community and adopts its norms and practices. Although the literature has not applied paradox theory or explicitly identied the

elements that make this tension paradoxical, the research suggests that this tension is interdependent, simultaneous, and persistent.

For instance, this tension fundamentally arises from the dual objectives of CVC programs, namely, achieving strategic vs. nancial

goals and whether they will focus on one over the other (Dokko and Gaba, 2012). CVC programs that identify more with corporate

parents are likely to recruit insiders, adopt generic corporate compensation schemes, and curb CVC autonomy, which promotes equity

and collaboration between CVC programs and other units, leading to greater achievement of strategic goals. In contrast, CVC programs

that identify more with the VC/startup community tend to recruit outsiders, follow high-powered VC incentive schemes, and allow

greater CVC autonomy, which leads to achieving greater nancial performance. A recent meta-analysis study found that the pursuit of

strategic goals leads to the achievement of greater nancial performance, which suggests the “interdependent” nature of CVC programs

that pursue dual objectives (Huang and Madhavan, 2021). Thus, we expect that achieving dual objectives by aligning the capabilities/

networks and policies/structures with both the parent corporation and the startup/VC community would lead to greater performance.

Moreover, studies have recognized that as CVC programs belong to both the corporate parent and the startup/VC community, con-

tradictory institutional pressures exist “simultaneously” and “persist” over time (Souitaris et al., 2012). Although the literature has

focused only on the contradictory characteristic of this tension, we suggest that this tension meets all the key elements of a paradox and

can be perceived as one.

6.2.3. The paradoxical nature of “CVC as a threat vs. an opportunity” tension

The literature has thus far focused on the “contradictory” strategies that can be adopted by VCs/startups when they engage with

CVC programs; they can perceive CVC as a threat because of the potential corporate opportunism and set up tools to protect their own

interests by limiting CVC involvement, whereas they can perceive CVC as an opportunity to access valuable corporate resources and

invite greater CVC involvement. This tension has typically been conceptualized and understood in the literature as a “sharks dilemma,”

where VCs or startups face a competing choice between engaging with corporate investors on CVC deals or walking away from them, as

both choices have advantages and disadvantages (e.g., Katila et al., 2008). However, by analogously applying the “paradox of

openness” logic (e.g., Foege et al., 2019; Niesten and Stefan, 2019; Ritala and Stefan, 2021), we propose that this tension can be

E. Jeon and M. Maula

Journal of Business Venturing 37 (2022) 106226

Table 3

Potential avenues for future research on the tensions in CVC.

Potential future research avenue Possible research questions

Existing streams

of tensions

in CVC

1. Taking approaches from the paradox lens to study when

and how the paradoxes become salient or latent (e.g.,

plurality, scarcity, change).

•How and when do plurality, scarcity, or the change

initiative trigger the CVC-core paradox to become salient or

remain latent?

•How do the plural perspectives of corporate investors and

startups arising from operating in different countries,

cultures, industries, or sectors inuence the salience or

latency of the threat-opportunity paradox?

•How does the level of learning intent of corporate investors

exacerbate the threat-opportunity paradox faced by

startups?

•How do the pluralistic goals and perspectives of coinvestors

of CVCs elevate threat-opportunity paradoxical tensions?

•How does the resource scarcity or a lack of bargaining

power in startups inuence the salience or latency of the

threat-opportunity paradox? How would startups having

access to multiple alternative entrepreneurial nancing

sources, such as VCs, angels, and crowdfunding, as opposed

to those with limited alternatives, inuence the salience or

latency of the threat-opportunity paradox?

2. Learning from applications of the paradox lens in

analogous organizational phenomena (e.g., exploration-

exploitation paradox on the CVC-core paradox, multiple

institutional logics paradox on the parent-venture

paradox, trust-opportunism paradox and the paradox of

openness on the threat-opportunity paradox).

•How can the CVC-core paradox be managed by adopting

differentiation and integration practices on the opposite

poles across various CVC stakeholders?

•How does structurally separating a CVC program in two

teams (investing/knowledge sourcing) and integrating

them with coordination mechanisms help manage parent-

venture tensions?

•How and when do the centrality and compatibility of

multiple institutional logics lead the parent-venture

paradox to become salient or remain latent?

•How can CVC managers manage the parent-venture ten-

sions by engaging with and learning from CVC managers

from peer rms who are navigating similar tensions?

•At both the interorganizational and individual levels, how

does the trust-but-verify approach, which embraces the

paradox but also fosters relationalism, help cope with the

threat-opportunity paradoxes?

•How can layered collaboration schemes or the various

differentiation and integration practices between

promoting and limiting corporate investor involvement be

established by the startups to manage the second-order

tensions on “CVC as a value-adding investor vs. risk of

misappropriation”?

3. Taking approaches from the paradox lens to study how

the paradoxes can be managed (e.g., differentiating

levels, locations, or time, synthesis/integration with new

perspectives) or coped with (e.g., paradoxical thinking,

humor, irony).

•At the individual or team levels, how can the CVC-core

paradox be coped with or embraced by using paradoxical

cognition and thinking or by using discursive means (e.g.,

irony, humor) or dialogic activities (e.g., intervention,

learning, or sensemaking sessions)?

•How can structurally separating the CVC program from the

parent corporation by establishing a subsidiary or allowing

distinctive autonomy, incentive, and culture help manage

the threat-opportunity tension? How can geographically

separating the CVC program from the parent corporation

help manage the threat-opportunity tension?

•When and why have many CVC programs changed their

names to distance themselves from the parent company?

Can such name changes help manage the threat-opportunity

tension?

4. Taking a longitudinal and dynamic approach to

understand the evolution of paradoxes.

•What processes do various stakeholders employ to cope

with the CVC-core paradox that evolves over time as the

legitimacy of the CVC program changes within the

organization?

(continued on next page)

E. Jeon and M. Maula

Journal of Business Venturing 37 (2022) 106226

understood as a paradox, given the following characteristics. The tension between greater CVC involvement vs. limiting CVC

involvement strategies is “interdependent” because to be successful, VCs/startups require both greater CVC involvement in the

relationship to create value (e.g., Alvarez-Garrido and Dushnitsky, 2016; Chemmanur et al., 2014; Park and Steensma, 2013) and

limited CVC involvement to curb opportunistic behaviors (e.g., Masulis and Nahata, 2009; Maula et al., 2009). This tension is

“simultaneous” because threat and opportunity arise at the same time. Furthermore, this tension “persists” over time because corporate

investors are generally driven by strategic initiatives (Dushnitsky and Lenox, 2006), whereby threats and opportunities constantly

arise.

6.3. Avenues for future research

As noted above, the main tensions in CVC can be understood as paradoxes because they are not only contradictory but also

interdependent, simultaneous, and persistent, thereby meeting all criteria for being considered as paradoxes. However, while the CVC

phenomenon is rife with paradoxical tensions, thus far, the related CVC literature has stagnated by only using “paradox” as a label

rather than drawing on the paradox lens to understand the tensions in CVC. To address the limitations identied from our review and

facilitate continued progress in the understanding of tensions in CVC, we suggest that future research systematically leverage the

Table 3 (continued )

Potential future research avenue Possible research questions

•How does the salience of the second-order tension on “CVC

as a value-adding investor vs. risk of misappropriation”

change over time, and how does such salience inuence

performance outcomes?

5. Studying underdeveloped or incomplete paradoxes (e.g.,

studying the tensions arising among the actors’ interests

or objectives, studying two actors’ interests on both sides

of the tensions).

•When and how do the paradoxical tensions between CVC

programs and various internal stakeholders, such as BUs,

R&D units, and other corporate development units, become

salient and can be managed to produce positive outcomes?

•What is the nature of the paradoxical tension between CVC

program autonomy vs. corporate parent control?

Considering both the CVC and senior managers’

perspectives, how and under what conditions does the

control-autonomy paradox become salient or latent, how

can it be managed, and what are the outcomes?

6. Examining the positive or negative outcomes of

paradoxes.

•How and when can tensions among multiple actors be

managed to produce positive or negative outcomes?

Novel streams of

tensions in

CVC

7. Using multiple-actor and multilevel perspectives to study

and manage nested and knotted paradoxes in CVC.

•How does structuring a CVC program in such a way that it is

closer to the corporate parent simultaneously inuence the

salience or latency of the CVC-core paradox and the threat-

opportunity paradox?

•How do the cognitions, motivations, and perceptions of

stakeholders at different levels and interfaces become

“socially aggregated” when working with tensions in CVC?

8. Exploring new interfaces, actors, and the related

paradoxes in the CVC phenomenon (e.g., CVC interfaces

with other parts of the parent corporation, such as legal,

marketing, supply chain, or internal corporate

venturing).

•How do the legal, marketing, and supply chain functions

that manage the complementary assets inside the corporate

parent interact with the CVC programs? How can tensions

arise and be managed between BUs that are reluctant to

share their distribution channels and CVC portfolio

companies that are attracted to accessing these distribution

channels?

•How do tensions arise between internal corporate venturing

units and CVC programs when they compete for a common

pool of organizational resources and collaborate with each

other to achieve organizational innovation goals? How can

such tensions be managed?

9. Combining the dialectical perspective with the paradox

perspective to study the political, institutional, and social

contexts of contradictions, various practices used for

managing conicts, and the potentially dynamic nature

and transformation of paradoxes.

•By drawing on the dialectical perspective, how does the

salience or latency of paradoxes change over time in

political, institutional, or social contexts, and how can it be

transformed?

10. Identifying and studying unexplored paradoxes in CVC

by learning from applications of the paradox lens in

analogous organizational phenomena (e.g., corporate

nancial goals vs. sustainability).

•By drawing insights from research on managing the

tensions between protability and corporate sustainability,

how can compensation packages that integrate nancial

and strategic performance criteria help manage the tensions

between the strategic and nancial objectives of CVC?

E. Jeon and M. Maula

Journal of Business Venturing 37 (2022) 106226

existing and rapidly evolving paradox research and frameworks (Hargrave and Van de Ven, 2017; Lewis, 2000; Poole and Van de Ven,

1989; Putnam et al., 2016; Schad et al., 2016; Waldman et al., 2019). The paradox literature can guide directions for future research on

tensions in CVC by suggesting at which levels paradoxes surface; how paradoxes should be classied; when and how paradoxes become

salient or latent (e.g., plurality, scarcity, change); how paradoxes can be managed (e.g., differentiating levels, locations, or time,

synthesis/integration by using new perspectives) or coped with (e.g., paradoxical thinking, humor, irony); and what the outcomes of

such paradoxes are (Schad et al., 2016). In the following, we rst consider research opportunities that could extend the understanding

of the main tensions that have already been studied in the reviewed body of the CVC literature. Next, we identify novel opportunities to

make progress in understanding unexplored paradoxes in CVC as well as to use CVC as a context to create a new theoretical under-

standing of paradoxes in organizational research. A summary of potential avenues for future research and possible research questions

on tensions in CVC is provided in Table 3.

6.3.1. Future research in the existing streams of literature on tensions in CVC

We propose that future research apply insights from the paradox literature to the existing streams of literature on tensions in CVC as

follows.

6.3.1.1. CVC-core paradox. Although the literature on “CVC-based exploration vs. core business-focused exploitation” (CVC-core)

tension has been most extensively discussed among the three main tensions in CVC, accounting for 55% of all CVC tensions, we

consider that there are still ample opportunities for scholars to develop it further by drawing on insights from the paradox literature, as

subsequently described. First, our review suggests that the CVC-core paradox is characterized by multiple stakeholders’ pluralistic

demands and perspectives, competition for scarce resources, and change initiatives,

which are common triggers for making paradoxes

salient (Smith and Lewis, 2011). However, to date, the literature on tensions in CVC has not examined these triggers, which are

promising avenues for future research. We suggest that future studies examine how the variety or number of stakeholders who

participate in the CVC decision-making process, the scarcity of resources that must be allocated among those stakeholders, or the

change initiatives pursued at different levels can inuence the salience of the CVC-core paradox. This research avenue, using the

paradox lens to better understand when and how paradoxes become salient or remain latent, is listed in Table 3 as the rst avenue for

future research.

Second, our review shows that the literature on tensions in CVC has suggested various ways to manage CVC-core tensions. We

expect that many paradox studies on exploration vs. exploitation can provide novel insights into this literature and help further our

understanding of how to manage CVC-core paradoxes. At the organizational level, Andriopoulos and Lewis (2009) found that new

product design rms cope with the exploration-exploitation paradox by (i) differentiating through diversifying between more routine,

protable projects and high-risk, breakthrough projects, temporally separating project constraints and freedom, and temporally and

structurally separating work modes and (ii) achieving integration by developing a paradoxical vision, improvising purposefully, and

nurturing paradoxical work identities by socializing. We suggest that future research examine how the CVC-core paradoxes can be

managed by adopting differentiation and integration practices on the opposite poles across various CVC stakeholders (avenue 2 in

Table 3).

Third, the paradox lens suggests that various approaches could be considered when managing tensions (e.g., differentiating levels,

locations, or time, synthesis/integration with new perspectives) or coping with them (e.g., paradoxical thinking, humor, irony), as

noted in avenue 3 in Table 3. For instance, we expect that more micro-level qualitative studies at the team or individual levels could

provide new insights into managing these CVC-core tensions (Fairhurst and Putnam, 2019; Schad et al., 2016). For example, Smith and

Tushman (2005) emphasized the top management team’s paradoxical cognition (e.g., articulating a paradoxical frame, cognitive

differentiating and integrating) in dealing with the contradictions in exploration and exploitation. We suggest that future research

examine how the CVC-core paradoxes can be coped with by using paradoxical cognition and thinking (Luscher and Lewis, 2008) at

various managerial levels. Future research building on topic modeling (Hannigan et al., 2019) and other novel computer-based lan-

guage processing techniques could facilitate further advancements in the literature, which has thus far used relatively limited measures

of top management cognition (e.g., Maula et al., 2013). We also propose that future research examine how the use of discursive means

such as irony or humor (Gylfe et al., 2019; Kwon et al., 2020; Putnam et al., 2016) can help managers embrace CVC-core paradoxes that

arise at individual levels (Waldman et al., 2019; Zhang and Han, 2019). Moreover, various dialogic activities (e.g., intervention,

learning, or sensemaking sessions) can support multiple stakeholders in approaching opposite poles equally and innovating code-

veloped meanings that may also serve as potential avenues for future research with regard to managing these paradoxes (Putnam et al.,

2016: 129).

Fourth, the literature on tensions in CVC has not considered dynamic perspectives, as noted in avenue 4 in Table 3. We suggest that

future research on the CVC-core paradoxes take a longitudinal and dynamic process perspective from the paradox literature to obtain a

more detailed understanding of the processes through which individuals and organizations cope with paradoxical tensions in CVC

(Schad et al., 2016). For example, taking a paradox perspective, Raisch and Tushman (2016) showed that when scaling up, exploratory

business units within established corporations initially integrate with the corporate parent while differentiating from their peer units,

Plurality, which refers to the diverse perspectives, interests, and objectives of multiple actors, gives rise to competing goals, conicting pro-

cesses, and uncertainty, thus leading to paradox salience (Smith and Lewis, 2011). The paradox literature also suggests that resource scarcity el-

evates the tensions between actors with competing needs with regard to securing resources (Smith and Lewis, 2011). Change initiatives cause

conict between current practices and future opportunities, which, for example, often make the exploration-exploitation tensions salient.

E. Jeon and M. Maula

Journal of Business Venturing 37 (2022) 106226

but that later, they shift to integrating with peer units and differentiating from the corporate parent. Future studies on the CVC-core

paradoxes can examine the processes that multiple stakeholders employ to cope with paradoxical tensions that evolve over time as the

legitimacy of the CVC program changes within the organization.

Fifth, we call for more attention to be given to understudied and incompletely identied paradoxes, such as the tensions that arise

among actors’ interests or objectives in CVC-core paradoxes (avenue 5 in Table 3). For example, the “CVC as a complementary and

essential tool vs. a disruptive and risky tool (internal stakeholder perspective)” second-order tension involves interactions with various

internal stakeholders such as BUs, R&D units, and other corporate development units. However, the literature has mostly focused on

whether these stakeholders complement or substitute CVC programs rather than discussing the tensions that arise between CVC

programs and stakeholders (e.g., Kim et al., 2016). Prior research suggests that the different objectives or interests of these organi-

zational units can cause tensions with CVC programs and thus may affect the performance of CVC programs. For example, CVC

programs and internal R&D units have persistent contradictory interests because they compete for the same pool of organizational

resources (e.g., technical/business support from BUs, the attention of senior management, capital). At the same time, they have

continuing interdependent interests in pursuing common organizational innovation goals. Future research could examine when and

how such paradoxical tensions between CVC programs and internal R&D units become salient and can be managed to produce positive

outcomes.

6.3.1.2. Parent-venture paradox. Among the three main tensions, the “CVC as part of a parent corporation vs. a startup/VC community

(parent-venture)” tension has been the least studied, accounting for 14% of all CVC tensions. We suggest that future research draw

insights from the paradox literature to extend our understanding of parent-venture tension as follows. First, by analogously applying

insights from studies on how exploration-exploitation tension is managed (as listed in avenue 2 in Table 3) (e.g., Andriopoulos and

Lewis, 2009), future studies can examine how CVC programs manage the parent-venture paradox by (i) structurally separating a CVC

program into two teams, in which one team draws capabilities/networks and follows the structures/policies of the corporate parent to

experiment with or recombine the knowledge sourced from the portfolio startups to the BU operations and the other team draws on

capabilities/networks and follows the rules of the VC/startup community to focus on investing activities and (ii) integrating those two

teams by housing them under the CVC program and setting up adequate coordination mechanisms.

By combining insights from the

institutional logics and paradox literature (Besharov and Smith, 2014; Pant and Ramachandran, 2017; Perkmann et al., 2019), we

suggest that future research examine how and when the centrality and compatibility of multiple institutional logics lead the parent-

venture paradox to become salient or remain latent. Furthermore, future research could examine how CVC managers can manage

parent-venture tensions by engaging with and learning from CVC managers from peer rms who are navigating similar tensions

(Pamphile, 2021).

Additionally, whereas paradoxical tensions often involve the competing demands of two stakeholders with conicting but

persistent interests, the research on the “VC rules of the game vs. corporate policies and structures” second-order tension has focused

only on the competing demands of one party’s perspective rather than considering the perspectives of the two actors on both sides of

the tension. For example, the literature on CVC program autonomy has taken a one-sided CVC manager’s perspective, assuming that

CVC autonomy is either benecial or detrimental. However, the autonomy vs. control literature suggests that the drawbacks of CVC

autonomy, such as CVC managers’ opportunism or the fragmented implementation of organizational goals, increase the need to

control CVC managers’ behavior through senior managers’ monitoring and intervention (e.g., Shimizu, 2012). Taking the paradox

perspective, as noted in avenue 5 in Table 3, future research could examine the CVC program autonomy vs. corporate parent control

tension by considering both the CVC and senior managers’ perspectives and inquiring how and under what conditions the paradox

becomes salient, how it can be managed, and what the potential outcomes are.

6.3.1.3. Threat-opportunity paradox. Among the three main tensions, the “CVC as a threat vs. an opportunity (threat-opportunity)”

tension has been the second most studied, accounting for 31% of all CVC tensions. We propose that the understanding of this tension

can be deepened by drawing on the paradox literature in the following ways. First, our review shows that the “CVC as a value-adding

investor vs. risk of misappropriation” second-order tension has been extensively studied, especially with regard to how it should be

managed by taking the corporate investor’s perspective. Nevertheless, there are many opportunities to extend this research by drawing

on insights from the paradox literature. For instance, in addition to accepting and learning to live with a paradox as one potential

approach to managing paradoxes, Poole and Van de Ven (1989) suggested paying attention to the levels or locations of analysis,

temporal dimensions, or new perspectives as alternative approaches (see avenue 3 in Table 3). At the organizational level, future

research can examine the impact of structurally separating the CVC program from the parent corporation by establishing a subsidiary

or allowing distinctive autonomy, incentive, and culture to manage this tension; geographically separating the location of the CVC

program from that of the parent corporation can also be considered to manage this tension. Along this line of research, the narrative

approaches in managing paradoxical tensions (e.g., Maclean et al., 2020) could enhance the understanding of when and why many

Although not building on the paradox literature, in an inductive study, similarly, Burgelman et al. (2021) discussed this form of a CVC program

as a “hybrid CVC.”

E. Jeon and M. Maula

Journal of Business Venturing 37 (2022) 106226

CVC programs have, for instance, changed their names to distance themselves from the parent company.

Furthermore, as noted in

avenue 2 in Table 3, at both the interorganizational and individual levels, we suggest that future studies draw on insights from the

trust-opportunism paradox literature (Lado et al., 2008) and examine the effect of the trust-but-verify approach, which embraces the

paradox but also fosters relationalism, on coping with threat-opportunity paradoxes.

Second, the literature on how to manage the “CVC as a value-adding investor vs. risk of misappropriation” second-order tension

from the startup’s perspective is underdeveloped and deserves more attention, especially by drawing on insights from the “paradox of

openness” literature, as suggested in avenue 2 in Table 3. For example, to address the paradox of openness, Bogers (2011) suggested

establishing varying levels of collaboration schemes, such as adding a licensing agreement with partner rms. Foege et al. (2019)

proposed that differentiation between knowledge sharing and protection and their integration are needed to manage the paradox of

openness. For instance, they suggested that knowledge providers use formal practices such as patent thicketing (differentiation),

patent pending (integration), and nondisclosure agreements (differentiate) and informal practices such as selective revealing (inte-

gration), solution black-boxing (differentiation), controlling complementary assets (differentiation), and intermediary bypassing

(integration). Additionally, employee training on intellectual property modularity can help manage the paradox (Salter et al., 2014).

We suggest that future studies examine how layered collaboration schemes or the various differentiation and integration practices

between promoting and limiting corporate investor involvement can be established to manage the second-order tensions on “CVC as a

value-adding investor vs. risk of misappropriation” faced by startups. Furthermore, taking a dynamic perspective (avenue 4 in Table 3),

future research can study how the salience of the second-order tension changes over time and how such salience inuences perfor-

mance outcomes (Schad et al., 2016).

Third, prior literature has suggested that the threat-opportunity tension can become salient under a weak IPP regime and when

there is greater technological overlap between corporate investors and startups (e.g., Dushnitsky and Shaver, 2009). As noted in

avenue 1 in Table 3, we propose that future studies draw on the paradox literature, which suggests that plurality, change, or scarcity

can impact the salience of a paradox (Smith and Lewis, 2011). For example, future studies can examine how the plural perspectives of

corporate investors and startups arising from operating in different countries, cultures, industries, or sectors can inuence the salience

of the threat-opportunity paradox (e.g., Niesten and Stefan, 2019). Relatedly, future research can examine how having multiple co-

investors with pluralistic goals and perspectives in a syndicate with corporate investors could elevate paradoxical tensions. In

particular, the literature suggested that young startups with few resources face heightened tensions when dealing with large estab-

lished rms (Diestre and Rajagopalan, 2012). We suggest that future scholars explore how resource scarcity or a lack of bargaining

power in startups increases the salience of the threat-opportunity paradox (e.g., Niesten and Stefan, 2019). For example, how would

startups having access to multiple alternative entrepreneurial nancing sources, such as VCs, angels, and crowdfunding, as opposed to

those with limited alternatives, inuence the salience of the threat-opportunity paradox? Additionally, interesting inquiries can be

made regarding how the level of learning intent of the corporate investor exacerbates the threat-opportunity paradox (e.g., Niesten and

Stefan, 2019).

6.3.1.4. All three main paradoxes. Common to all three main paradoxes, few studies have examined the consequences of tensions in

CVC (e.g., Basu et al., 2016a; Hill and Birkinshaw, 2008; Hill and Birkinshaw, 2014). Therefore, we suggest that another fruitful area

for future research is the positive and negative outcomes of each paradox (Schad et al., 2016) (avenue 6 in Table 3). Although tensions

can be problematic (e.g., BUs being concerned about cannibalization when CVC programs invest in disruptive startups), they can also

be a source of learning within corporations and lead to future competitive advantage. Additional research is warranted to improve the

understanding of how and when tensions among multiple actors can be managed to produce positive or negative outcomes.

6.3.2. Future research in the novel streams of literature on tensions in CVC

In addition to studying the main paradoxes we proposed in CVC, we suggest that future studies further draw on insights from the

evolving paradox research as well as the CVC practitioner literature to identify and pursue novel research opportunities as follows.

First, the paradox literature has suggested that paradoxes are often nested and knotted and occur at multiple levels (Putnam et al.,

2016; Schad et al., 2016), and we suggest that future studies on tensions in CVC adopt such perspectives (avenue 7 in Table 3). For

example, the three main paradoxes in CVC we proposed are clearly interdependent; the way in which the “CVC as part of a corporate

parent vs. a VC/startup community” paradox is managed affects the paradoxes related to “CVC-based exploration vs. core business-

focused exploitation” and “CVC as a threat vs. an opportunity.” Structuring a CVC program in such a way that it is closer to the

corporate parent could make the CVC-core paradox less salient but the threat-opportunity paradox more salient. Additionally, while

we know that there are multiple internal and external stakeholders involved in CVC decisions, we know little about how the cognitions,

motivations, and perceptions of stakeholders at different levels and interfaces become ‘socially aggregated’ when working with ten-

sions in CVC (Schad et al., 2016), which is another promising avenue for future research. Embracing and studying such nested and

knotted paradoxes is one of the novel research directions for paradox theory (Cunha and Putnam, 2019: 102).

Second, insights from the practitioner literature (e.g., CB Insights, 2018; Chesbrough, 2002; Global Corporate Venturing, 2020;

Lerner, 2013) indicate that future studies should explore new interfaces, actors, and related paradoxes in the CVC phenomenon (see

Although the majority of CVC program names closely resemble the parent corporation's name (e.g., Intel Capital of Intel), many CVC programs

have distanced themselves from the corporate parent through distinct naming early on (e.g., S.R. One of Glaxo Smith Kline and ZX Ventures of

Anheuser-Busch InBev) or by changing their names afterward (e.g., NGP Capital of Nokia, which used to be Nokia Growth Partners; GV of Alphabet,

which used to be Google Ventures of Google; and M12 of Microsoft, which used to be Microsoft Ventures).

E. Jeon and M. Maula

Journal of Business Venturing 37 (2022) 106226

avenue 8 in Table 3). For example, while accessing complementary corporate assets has been discussed as one of the motivations for

startups to strike CVC deals with corporate investors (e.g., Katila et al., 2008), most of the CVC literature has overlooked the actors,

such as the legal, marketing, and supply chain functions, that manage these complementary assets inside the corporate parent and how

CVC programs interact with them. For example, access to large-scale distribution channels of corporate parents can be attractive for

startups, whereas BUs may be reluctant to share their distribution channels with CVC portfolio companies, which is a potential area for

future research. For another example, while there are various internal stakeholders, such as BUs, corporate development units, and

senior managers, who are involved in the CVC-core paradox, the role of internal corporate venturing units has not yet been examined.

Future studies can examine the tensions arising between internal corporate venturing units and CVC programs when they compete for a

common pool of organizational resources and collaborate with each other to achieve organizational innovation goals.

Third, new models used to research paradoxes have highlighted different approaches, such as the dialectical perspective (Hargrave

and Van de Ven, 2017; Putnam et al., 2016), which can be employed to manage the contradictions in organizations and have suggested

that more attention be given to the political, institutional, and social contexts of contradictions,

various practices used for managing

conicts, and the potentially dynamic nature and transformation of paradoxes (Hargrave and Van de Ven, 2017). For instance, while

early studies in CVC highlighted many apparent tensions in CVC, through learning over time, CVC activity has evolved, and some of the

paradoxes have disappeared or been transformed. For example, while the short-termism of corporate investors used to be a major

problem when interacting with VCs and entrepreneurs who require a long-term commitment, many CVC programs have found

adequate structural mechanisms (e.g., inviting external coinvestors to a CVC fund) to ensure the long-term commitment of CVC,

thereby transforming the initially problematic paradox. We suggest that future studies on tensions in CVC take dialectic perspectives

and examine how the salience of paradoxes can change over time in political, institutional, or social contexts and can be transformed

(avenue 9 in Table 3).

Fourth, many underexplored tensions in CVC could also learn from the many applications of the paradox lens in other analogous

organizational settings (avenue 10 in Table 3). For example, CVC investing has the dual objectives of achieving strategic benets and

nancial returns (Dushnitsky and Lenox, 2006), where tensions can arise between achieving short-term protability and long-term

strategic goals. Future studies on managing such tensions could draw insights from nuanced parallel research on managing the ten-

sions between protability and corporate sustainability (e.g., Hahn et al., 2018; Hahn et al., 2015). For example, insights from the

literature on tensions in sustainability (e.g., Hahn et al., 2018; Hahn et al., 2015) suggest combining short- and long-term objectives by

implementing compensation packages that integrate nancial and strategic performance criteria to help manage the dual objectives

tension in CVC.

6.4. Concluding remarks

Motivated by the increasing scholarly interest in CVC and the complex nature of the phenomenon that is full of tensions, we

conducted a systematic review to assess the progress made toward understanding the tensions in CVC and to identify avenues for future

research. In doing so, we contribute to the literature by introducing the paradox lens (Lewis, 2000; Putnam et al., 2016; Schad et al.,

2016) to the research on CVC, which as a context, is full of tensions. The paradox lens and related approaches used in this research can

improve the understanding of various tensions that occur at multiple levels and interfaces in CVC, how they can be analyzed, managed,

and coped with, and what the outcomes are. By drawing on insights from the paradox literature, we propose the identied tensions to

be evaluated as paradoxes and highlight opportunities for future research on the tensions in CVC that we identied and those that are

still underexplored. Finally, our study highlights CVC as a promising and fruitful context for the further development of the theoretical

understanding of tensions and paradoxes in organizational research. We expect that the insights from our study of the tensions and

paradoxes in CVC can also facilitate an improved understanding of tensions in other organizational contexts, such as internal corporate

venturing, that also face multiple tensions.

CRediT authorship contribution statement

Euiju Jeon: Conceptualization, Methodology, Investigation, Formal analysis, Data curation, Visualization, Writing – original draft,

Writing – review & editing. Markku Maula: Conceptualization, Methodology, Formal analysis, Visualization, Writing – original draft,

Writing – review & editing.

Acknowledgements

We acknowledge the valuable feedback received on the previous versions of the paper from Marina Biniari, Gary Dushnitsky,

Thomas Keil, Anu Wadhwa, as well as from the seminar participants at the Strategic Management Annual Conference 2020, Aalto

University, and Technical University of Denmark. We also thank JBV Field Editor Vangelis Souitaris and three anonymous reviewers

for their very helpful comments and suggestions.

For example, while most CVC studies have been based on the US and Europe, corporate investors in Asia, especially Chinese investors, represent

the largest CVC deals in terms of value and number in the past decade (Global Corporate Venturing, 2020). Asia could be a promising setting for

examining the inuence of political, institutional, and social heterogeneity on the evolution of CVC paradoxes.

E. Jeon and M. Maula

Journal of Business Venturing 37 (2022) 106226

Appendix 1. A list of peer-reviewed CVC articles in the corpus

Allen and Hevert (2007) Dushnitsky and Shaver (2009)* Pahnke et al. (2015)

Alvarez-Garrido and Dushnitsky (2016) Flamand and Frigant (2017) Paik and Woo (2017)

Anokhin et al. (2011) Fulghieri and Sevilir (2009) Park and Steensma (2012)

Anokhin et al. (2016) Gaba and Bhattacharya (2012) Park and Steensma (2013)

Arruda et al. (2013) Gaba and Dokko (2016)* Pontikes (2012)

†

Basu and Wadhwa (2013) Gaba and Meyer (2008) Rind (1981)*

Basu et al. (2011) Galloway et al. (2017) Riyanto and Schwienbacher (2006)

Basu et al. (2016a) Georgallis and Durand (2017) Sahaym et al. (2010)

Belderbos et al. (2018) Guo et al. (2015) Sahaym et al. (2016)

Bengtsson and Wang (2010) Guo et al. (2019) Schildt et al. (2005)

Benson and Ziedonis (2009) Hallen et al. (2014) Siegel et al. (1988)*

Benson and Ziedonis (2010)* Hellmann (2002) Smith and Shah (2013)

Bertoni et al. (2013) Hill and Birkinshaw (2008) Souitaris and Zerbinati (2014)

Bertoni et al. (2015)

†

Hill and Birkinshaw (2014) Souitaris et al. (2012)

Biniari et al. (2015) Hill et al. (2009) Standaert and Manigart (2018)

Bleicher and Paul (1987) Ivanov and Xie (2010) Sykes (1986)*

Bottazzi et al. (2008) Junni et al. (2019) Sykes (1990)*

Braune et al. (2021) Katila et al. (2008) Titus and Anderson (2018)

Ceccagnoli et al. (2018) Keil (2004) Titus et al. (2017)

Chemmanur et al. (2014) Keil et al. (2008a) Titus et al. (2020)

Cirillo (2019) Keil et al. (2008b) Tong and Li (2011)

Colombo and Murtinu (2017) Keil et al. (2010) Uzuegbunam et al. (2019)

Colombo and Sha (2016)* Kim et al. (2016) Van de Vrande et al. (2009)

Colombo et al. (2006) Lee et al. (2018) Van de Vrande (2013)

Colombo et al. (2016) Lin and Lee (2011) Van de Vrande et al. (2011)

Covin and Miles (2007) Kim et al. (2019) Van de Vrande and Vanhaverbeke (2013)

Da Gbadji et al. (2015) Ma (2019) Wadhwa and Basu (2013)

de Bettignies and Chemla (2008) Maas et al. (2020) Wadhwa and Kotha (2006)

de Leeuw et al. (2019) Masulis and Nahata (2009) Wadhwa et al. (2016)

Di Lorenzo and Van de Vrande (2019) Masulis and Nahata (2011) Wang and Wan (2013)

Dimov and Gedajlovic (2010)

†

Maula et al. (2003) Weber and Weber (2005)*

Dokko and Gaba (2012) Maula et al. (2005) Weber and Weber (2011)*

Dushnitsky and Lavie (2010) Maula et al. (2009) Weber et al. (2016)*

Dushnitsky and Lenox (2005a)* Maula et al. (2013) Winters and Murn (1988)*

Dushnitsky and Lenox (2005b)* Miles and Covin (2002) Yang et al. (2009)

Dushnitsky and Lenox (2006) Mohamed and Schwienbacher (2016) Yang et al. (2014)

Dushnitsky and Shapira (2010) Nason et al. (2015) Zu Knyphausen-Aufse (2005)

Articles without any marks fall under one main tension identied in this paper.

†

Articles that do not fall under the three main tensions identied in this paper.

Articles that fall under more than two main tensions identied in this paper.

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E. Jeon and M. Maula

Journal of Business Venturing 37 (2022) 106226

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E. Jeon and M. Maula

Innovation at the interface: A configurational approach to corporate venture capital

Article

Full-text available

Jan 2025
J BUS VENTURING

This study explores how corporate venture capital (CVC) units can be configured to effectively achieve innovation performance and succeed amidst the tensions they face at the intersection of the corporate and venture domain. Using a fuzzy-set qualitative comparative analysis (fsQCA) of 30 dedicated CVC investment arms, we analyze how successful units configure their internal arrangements in response to these tensions and generate various innovation outcomes for their parent organizations. We identify four different solutions for effective CVC unit configurations, highlighting that explorative and exploitative innovation success require different setups. Moreover, we find that more mature and explorative CVC units distance themselves via buffering from their corporate sponsor, while at the same time increasing their efforts to maintain deliberate connections via bridging to representatives of the very same corporate environment they stem from. For ambidextrous CVC units, a more dynamic setup that allows corporate leadership to selectively initiate collaboration with the corporate core when beneficial while facilitating distancing at other times proved successful. Our study contributes new evidence and theory on how CVC units can navigate tensions and balance competing demands at the interface of the corporate and venturing domains. Executive summary Missing from the robust debate over how corporate venture capital (CVC) units ought to be organized for success is a more comprehensive appreciation of the ongoing tensions that CVC units face. By highlighting the inconsistent organizational goals and conflicting demands these dedicated investment arms face at the intersection of the corporate and venture worlds, we provide a nuanced view of how CVC units can effectively be operated. Using a fuzzy-set qualitative comparative analysis (fsQCA) of 30 dedicated CVC investment arms, we explore how successful units configure their internal arrangements in response to divergent demands and tensions vis-à-vis the corporate parent and the ventures they are mandated to invest in. Extending the literature on CVC, we identify four different solutions for effective CVC unit configurations and find that explorative and exploitative innovation success demand different set ups. Moreover, we find that especially more mature and explorative CVC units engage in dynamic responses, distancing . themselves from their corporate sponsor (buffering) while at the same time increasing their efforts to maintain deliberate connections to representatives of the very same corporate environment they stem from (bridging). These and other findings will be discussed, and our rich narratives explain how successful CVC units can be employed effectively to achieve various innovative outcomes.

Deconstructing Corporate Accelerator Programs: Insights From a Systematic Literature Review

Article

Jan 2025
IEEE T ENG MANAGE

Corporate accelerators (CAs) are corporate-run programs supporting startup development and growth while generating mutual benefits. Despite the considerable academic attention they have received, gaps in the discourse still persist. These include a lack of consistent understanding of what constitutes a CA within and across (emerging) subtypes and how they operate and can be configured to achieve specific outcomes. As a result, the precise operational and strategic logic of CAs remains unclear and fragmented, complicating theory development, empirical testing, and practical implementation. To address these shortcomings, we employ a CIMO (Context, Interventions, Mechanisms, Outcomes) logic rooted in the realist tradition to both systematically organize and synthesize existing findings. Specifically, this paper advances the discourse on CAs by clarifying their conceptualization and operation within and across subtypes. Additionally, it links specific interventions and mechanisms to outcomes through generalizable propositions. The resulting framework offers theoretical insights for configuring CAs to fulfill specific strategic roles in various organizational settings, with implications for their effective use and paving the way for future empirical testing and performance evaluation.

The collusion behavior of venture capitalists and entrepreneurs based on “guanxi”: evidence from China

Article

Full-text available

Oct 2024

The role of venture capital in promoting entrepreneurship and funding innovation cannot be underestimated. However, it is important to acknowledge noteworthy concerns associated with collusive behavior in the venture capital process. “Guanxi” is a relatively intimate and closed social relationship, which can impact venture capital through trust and social obligations. Drawing on the theories of unethical pro-relational behavior and social networks, using data from GEM-listed companies supported by venture capital from 2009 to 2021, this research investigates the phenomenon of collusion behavior between venture capitalists and entrepreneurs, with a particular focus on the influence of “guanxi”. The research finds that the presence of “guanxi” between venture capitalists and entrepreneurs tends to facilitate collusive behavior. Specifically, “guanxi” tends to increase entrepreneurial self-interest behavior, and venture capitalists’ returns, infringe upon minority shareholders’ interests, and increase corporate operational risk. Moreover, the study further explores the moderator effect of equity incentives on such collusion behavior. This research not only enriches the theoretical framework of the relationship between “guanxi” and venture capital activities but also provides insight into the ethical implications associated with “guanxi”, contributing to the broader literature on social relationships and unethical behavior.

Where to invest? Effects of technological capabilities on corporate venture capital investments

Article

Jul 2024

Research Summary We investigate why a corporate investor makes more corporate venture capital (CVC) investments in certain areas than in others. Focusing on firms' different technological capabilities across distinct technology domains, we argue that a corporate investor's technological capabilities in a given domain affect its likelihood of investing in (1) ventures within the domain in an inverted U‐shaped manner and (2) ventures operating in other technologically complementary domains in a positive manner. We further claim that these two suggested relationships between technological capabilities and the likelihood of CVC investments are shaped by the technology growth rate of the focal domain. We test these arguments in the US medical sector, where incumbent firms are active in CVC investments as a means to acquire external knowledge. Managerial Summary We argue that firms exhibit different patterns in their choice of CVC investment areas based on their technological capabilities within a given technology domain. Our findings in the US medical sector indicate that firms are most likely to invest in ventures within domains where their technological capabilities are moderate—neither too weak nor too strong. This suggests that CVC investments serve gap‐filling purposes for technology intermediates. Moreover, corporate investors tend to invest in ventures within domains that are technologically complementary to their areas of strength. However, when a given domain experiences rapid growth, technology leaders in that domain shift their CVC investment focus from complementary areas to that domain to maintain their leading position.

The Affective Revolution in Entrepreneurship: An Integrative Conceptual Review and Guidelines for Future Investigation

Article

Jan 2025
J MANAGE

Entrepreneurial affect has emerged as a burgeoning area of study, with a wealth of articles demonstrating that affect, broadly conceptualized, plays an important part in entrepreneurial life. While a few affective phenomena, such as passion and positive and negative affect, are primarily driving the affective revolution in entrepreneurship, a wide range of additional forms of affect, from momentary feelings to enduring affective dispositions, have been found to influence entrepreneurs’ judgments, decision-making, attitudes, and behaviors in distinct parts of the entrepreneurial process. Moreover, entrepreneurs’ affective experiences and displays of these experiences influence entrepreneurial behaviors and investors’ decision-making. Although this is an exciting time for work on entrepreneurial affect, several theoretical and empirical inconsistencies impede further knowledge accumulation. To assess how and why affect is critical to entrepreneurship, to clarify the theoretical inconsistencies, and to provide an integrative framework, we conduct a systematic review of 276 published empirical and conceptual articles on entrepreneurial affect. In doing so, we analyze how various affective phenomena (e.g., emotions, moods, sentiments), along with their discrete forms (e.g., anger, grief, happiness), influence and are influenced by specific stages of the entrepreneurial process. We conclude that while this body of research confirms that entrepreneurship is an emotional endeavor, the collective approach has thus far obscured a more detailed and useful understanding of affect in each stage of the entrepreneurial process. We examine the theoretical and empirical approaches taken to date and lay out an agenda for future scholars, thus bolstering the affective revolution in entrepreneurship.

Effect of venture capital investment horizon on new product development: Evidence from the medical device sector

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Jan 2025
J BUS VENTURING

Decentralized Autonomous Organizations: The New Global Digital Venture Capital

Article

Nov 2024
Res Int Bus Finance

Complementarity or substitution? The impact of the coexistence of corporate and independent venture capitalists on innovation in Chinese firms

Article

Nov 2024
APPL ECON

Corporate incubation for platform growth and the transition to platform scaling: Between a rock and a hard place in the circular economy

Article

Nov 2024
TECHNOL FORECAST SOC

Compensation incentives, geographical distance, and the successful exit of indirect CVCs

Article

Aug 2024
Bus Process Manag J

Purpose The literature suggests that increasing the intensity of compensation incentives for corporate venture capital (CVC) managers can contribute to successful exits of direct CVCs. This study explores the impact of compensation incentives on the successful exits of indirect CVCs under different geographical distances between parent companies and indirect CVC managers. Design/methodology/approach The authors observed the compensation terms of CVC managers through investment announcements made by listed companies and used a probit regression model to test the hypotheses from a sample of 241 investment events with indirect CVCs in China. Findings The results show that if parent companies are geographically close to the managers of indirect CVCs, increasing the intensity of compensation incentives for managers will help the successful exit of indirect CVCs. However, if parent companies are not geographically close to indirect CVC managers, increasing the intensity of compensation incentives for managers will not promote the successful exit of indirect CVCs. Originality/value This study contributes significantly to the CVC literature. First, it sharpens our understanding of the differences in operational mechanisms between direct and indirect CVCs. Second, we find that the threshold returns of indirect CVC managers are non-negligible compensation incentives. Finally, the empirical evidence supports that in indirect CVC investments, the geographical distance between parent companies and managers is concerning because it affects whether compensation incentives contribute to the successful exit of indirect CVCs.

Systematicity in Organizational Research Literature Reviews: A Framework and Assessment

Article

Full-text available

May 2021

In this study, we first develop a framework that presents systematicity as an encompassing orientation toward the application of explicit methods in the practice of literature reviews, informed by the principles of transparency, coverage, saturation, connectedness, universalism, and coherence. We then supplement that conceptual development with empirical insights into the reported practices of systematicity in a sample of 165 published reviews across three journals in organizational research. We finally trace implications for the future conduct of literature reviews, including the potential perils of systematicity without mindfulness.

Paradox Peers: A Relational Approach to Navigating a Business-Society Paradox

Article

Full-text available

Apr 2021

Vontrese Pamphile

Despite advancements in our understanding of organizational paradox, we know little about how individuals navigate paradox when tensions are core to one’s occupational role, but not a dominant concern for senior leaders. This study explores how grantmakers working in corporate philanthropy navigate a business-society paradox when their leaders prioritize business over social objectives at the organization level. Through analyzing interview data from grantmakers alongside observations of their group meetings, I induce a peer-based model of navigating paradox. The findings reveal the important supportive role of relationships with “paradox peers”—ongoing, cooperative connections to individuals external to one’s organization but facing similar paradoxical challenges. I detail three relational mechanisms for engaging paradox that together facilitate the ability of individuals to navigate paradox in their home organizations: connecting with others to relieve tension, collectively protecting the paradox, and collaboratively brainstorming responses. My findings shift paradox scholarship towards a more relational understanding of navigating paradoxes, exploring how engaging tensions outside of one’s organizational boundaries can support the navigation of paradox internally.

A paradox within the paradox of openness: The knowledge leveraging conundrum in open innovation

Article

Full-text available

Feb 2021
IND MARKET MANAG

Firms’ innovative capabilities and performance increasingly rely on successful search and integration of internal and external knowledge. To this end, firms engage in various open innovation relationships, aiming to create and capture value in multi-actor contexts. This can give rise to a “paradox of openness” due to the contradictory role of knowledge as a key resource that creates value when shared, but also as a source of appropriability challenges. We explore the concept of a “paradox within a paradox;” the knowledge-leveraging paradox embedded within the paradox of openness. We integrate a knowledge-based view with paradox theory and develop a conceptual model to pinpoint core knowledge-related transferability and exposure tensions. We then show how these tensions are inversely moderated by innovation-related knowledge ambiguity. This ambiguity amplifies transferability tensions by making the knowledge more difficult to transfer and integrate across organizational boundaries, while relieving exposure tensions for the same reasons. We discuss potential solutions for resolving these core knowledge-related tensions by identifying separation and restructuring mechanisms that can facilitate simultaneous knowledge transfer and alleviate exposure hazards.

Using Verbal Irony to Move on with Controversial Issues

Article

Full-text available

Mar 2020

Irony is an effective means of dealing with controversy in organizations, but there is a paucity of knowledge of the various ways in which irony helps managers to do so without necessarily ‘solving’ those issues. By drawing on discursive incongruity theory, we examine the use of irony when managers are confronted with controversial issues in a multinational company. As a result, we identify and elaborate on four distinctively different pathways of how irony helps participants to move on: ‘acquiescing’ (framing understanding as having no alternative because of environmental constraints), ‘empowering’ (synthesizing a view through broad inputs from different individuals), ‘channelling’ (subsuming other interpretations under a single and often dominant view) and ‘dismissing’ (rejecting alternative interpretations and often reinforcing the status quo). On this basis, we develop a theoretical model that elucidates the process dynamics in dealing with and moving on with controversial issues and elaborates the specific characteristics of each of these four pathways. Our analysis also leads to a fuller understanding of the discursive underpinnings and intersubjective dynamics in irony use in organizations.

Corporate venture capital: important themes and future directions

Chapter

Dec 2016

Designs for Corporate Venture Capital: Emergence of a Hybrid Structural Orientation

Article

Jan 2021

Writing bold, broad, and rigorous review articles in entrepreneurship

Article

Nov 2021
J BUS VENTURING

Despite the importance of review articles in entrepreneurship, specific guidance to authors remains limited. Alongside JBV's rolling annual review issue, we provide authors practical tips for preparing review articles. Building on widely accepted principles employed in general management review articles, we tailor our guidance to the “entrepreneurship” way of writing review articles in entrepreneurship. Specifically, we call on authors to write bold, broad, and rigorous reviews that exemplify JBV's mission to publish and disseminate high-quality entrepreneurship research.

Dumb Money or Smart Money? Meta‐Analytically Unpacking Corporate Venture Capital

Article

Sep 2020

Research Summary As an important strategic tool for entrepreneurial ventures and for established corporations alike, corporate venture capital (CVC) has attracted significant research attention. However, extant studies are equivocal about CVC's performance impact, and measurement approaches vary widely. Separating CVC performance into its corporate and venture elements, we conducted a meta‐analytic structural equation model (MASEM) analysis to quantitatively synthesize 151 effect sizes from 68 studies. While results indicate that CVC does create value for both investing corporation and invested venture, they also hint at different magnitudes for, and nuanced interrelationships between, the various performance aspects. We highlight implications for CVC scholarship in terms of measurement and theory. Managerial Summary What is the bottom line impact of corporate venture capital (CVC)? While CVC is attractive to both startups and corporations, potential benefits are different for each participant—for example, capital and industry contacts for the startup, learning and financial returns for the corporation. The multiple and potentially competing benefits complicate the assessment of CVC's performance impact. Our quantitative summary of 68 empirical studies shows that CVC creates value for startups and corporations alike, but in varying magnitude, suggesting that the benefits are not equally shared between partners and across performance aspects. The nuanced distribution and interrelationship among CVC outcomes have practical implications for startup leaders and corporate investors as they enter into and manage CVC investments.

The Life Cycle of Corporate Venture Capital

Article

Jan 2020

Song Ma

This paper investigates why industrial firms conduct Corporate Venture Capital (CVC) investment in entrepreneurial companies. I test alternative views on CVC by exploiting the entry, investment, and termination decisions of CVC divisions. CVC entry concentrates in firms that experience deteriorations of internal innovation. At the investment stage, CVCs select startups with a similar technological focus but that have a non-overlapping knowledge base, and they integrate technologies generated from these ventures that create strategic value. CVCs are terminated when parent firms’ innovation recovers. Overall, the strategic desire to fix innovation weaknesses after adverse shocks motivates firms to adopt CVCs. Received November 15, 2017; editorial decision March 2, 2019 by Editor Francesca Cornelli. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

Paradoxical leader behavior in long-term corporate development: Antecedents and consequences

Article

Nov 2019

We analyze paradoxes embedded in long-term corporate development and conceptualize a new leadership approach: paradoxical leader behavior in long-term corporate development (PLB-CD). Paradoxical leader behaviors are characterized as seemingly both competing and interrelated. We posit that paradoxical leaders employ such behaviors to meet competing demands simultaneously and over time in the process of (a) maintaining both short-term efficiency and long-term development, (b) maintaining both organizational stability and flexibility, (d) focusing on both shareholders and stakeholder communities, and (d) conforming to and shaping collective forces in the environment. We conduct two studies with multiple samples to develop a measurement of PLB-CD. Our results demonstrate that long-term orientation is positively associated with paradoxical leader behavior, which in turn positively affects the increase of R&D investment, market share, and corporate reputation.