Gary Dushnitsky

Entrepreneurial Optimism in the Market for Technological Inventions

How do potentially optimistic entrepreneurs attract prospective investors? We investigate an entrepreneurs decision to pursue either disclosure---where investors inspect the invention---or a contingent payment scheme (CPS) offer (e.g., salary deferral, royalty-based license)---where an inventions value is inferred from the entrepreneurs willingness to make her pay contingent on the inventions success. Using a parsimonious model, we highlight the role of optimism and demonstrate that it only affects CPS ex post. As a result, a novel trade-off unfolds ex ante: In choosing an action that maximizes the valuation of the invention, a moderately wealthy entrepreneur weighs optimism discount (affecting CPS) versus imitation discount (affecting disclosure). More broadly, the paper advances a view of entrepreneurs as optimists, thus departing from the prevailing approach, which characterizes entrepreneurs as opportunistic individuals who consciously pursue self-serving goals.

WHEN DO FIRMS UNDERTAKE R&D BY INVESTING IN NEW VENTURES?

This paper explores the conditions under which firms are likely to pursue equity investment in new ventures as a way to source innovative ideas. We find that both industry-level and firm-level factors drive firms to invest more in new ventures. These results have important implications for the organization of R&D.

Crowdfunding in Europe: Determinants of Platform Creation across Countries

While the crowdfunding phenomenon has attracted considerable practitioner and scholarly attention, existing research predominantly reflects a U.S.-centric perspective. This article examines crowdfunding platform creation in 15 European countries. Despite the omnipresent reach of the internet, national boundaries shape the evolution of the European crowdfunding industry. Specifically, crowdfunding platform creation varies across countries and distinct national patterns emerge for crowdfunding activity in general. Moreover, econometric analyses suggest that country-level factors influence platform creation in European countries, with interesting variations across four crowdfunding models: Donation, Reward, Lending, and Equity.

Riding the Next Wave of Corporate Venture Captial

How can established companies harness the innovative power of entrepreneurial ventures? Corporate venture capital is increasingly the answer as more and more corporations use it as a key component of their innovation strategy. Gary Dushnitsky examines its resurgence.

Linking Technologies to Applications – Insights from Online Markets for Technology

Abstract An important precondition for resource redeployment is that firms are aware of the commercial applications for which their resources can be used. We take an inventing-firm perspective and ask: how many new commercial applications will a firm associate with an existing technological invention? We note that both technological and organizational characteristics determine the number of distinct applications firms consider feasible for a given technological invention. In particular, we suggest that inherently fungible technologies, that is, technologies that have a broad impact on other technological fields (highly general technologies), will be associated with a larger set of commercial applications. We also suggest that linking applications to an inherently general technology can be challenging when the technology is already embedded in organizational (commercial) routines. Proprietary data from an online marketplace allow us to investigate the applications firms consider feasible for their technological inventions. In line with extant work, a firm assigns a greater number of applications to more general technologies. As expected, however, this relationship is shaped by how the technology is embedded within the organization. Our results have implications for redeployment as firms may face challenges in the initial step of redeployment when fungible resources need to be linked to emerging market opportunities.

Publications and patents in corporate venture-backed biotech.

495 Our goal was to shed light on the impact of investor type on biotech startups’ innovation ouput as measured by patents and publications. To that end, we constructed a unique data set that integrates four different sources: Standard & Poor’s Compustat, the US Patent and Trademark Office (USPTO; Alexandria, VA, USA), VentureXpert (currently part of Thomson One Banker) and Web of Knowledge (formerly ISI). Specifically, we identified biotech startups founded between 1990 and 2003 that received one or more VC investment rounds through VentureXpert. Next, investors were classified as corporate venture capitalists building on VentureXpert categories and subsequent expert coding. For example, publicly listed corporations that pursued VC investments as a means of diversifying their financial holdings (e.g., the insurance company SunAmerica) were not classified as corporate venture capitalists. After patent information was collected from the USPTO, an automated, matching algorithm followed by human verification was used to match patents’ assignee information with biotech startups. The procedure took into consideration the location of the startup as noted in the patent, verified when necessary whether the startup had research laboratories in other locations and compared the inventors across different patents to ensure the accuracy of the matches. Only granted patents were included in our sample, and we used the date of application as it signifies the date of innovation and is unaffected by potential delays in the patent granting process. Similarly, information on scientific publications was assembled from the Web of Knowledge database. A publication was attributed to a biotech startup if listed as the affiliation of one of the authors. Of 572 biotech startups in our sample, 66% raised funding solely from traditional venture capitalists (that is, 374 were solely VC-backed startups) and 34% were backed by a syndicate that included a corporate venture capitalist (that is, 198 corporate VC–backed startups). The startups raised a total of

Seeding a Star or Constructing a Constellation? Corporate Venturing as an Ecosystem Strategy

20.01 billion, including

What Inventions do Corporate Entrepreneurship Programs Access? Corporate Venture Capital Investment in Complementary and Substituting Ventures

6.76 billion in corporate rounds (dollar amounts are adjusted to constant 2012 dollars). In seed or startup rounds, the average investment amounts were

When do incumbents learn from entrepreneurial ventures?: Corporate venture capital and investing firm innovation rates

4.75 million and

When do firms undertake R&D by investing in new ventures?

3.79 million in rounds that do or do not include corporate VC investors, respectively. For later rounds with or without corporate VC investors, the average investment amounts were