Strategic Alliances And Corporate Governance In Newly Public Firms: Evidence From Corporate Venture Capital

The authors examine IPOs of startups backed by Corporate Venture Capitalists (CVCs) and the propensity of CVC parents to establish strategic alliance with these startup firms. The authors investigate the differences in the governance structures of Venture Capital (VC) backed IPO firms. A major difference between CVCs and Traditional Venture Capitalists (TVCs) is that CVCs often invest for strategic reasons and their parent firms frequently enter into various types of strategic alliances with their portfolio firms that continue well beyond the IPO. The authors argue that such strategic alliances can have a significant impact on the governance structure of CVC backed firms, both when they go public and in the following years.