Venture Capital and Knowledge Transfer

Dessi, Roberta and Yin, Nina (2015) Venture Capital and Knowledge Transfer. TSE Working Paper, n. 15-555

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Official URL: http://tse-fr.eu/pub/29010

Abstract

This paper explores a new role for venture capitalists, as knowledge intermediaries. A venture capital investor can communicate valuable knowledge to an entrepreneur, facilitating innovation. The venture capitalist can also communicate the entrepreneur's innovative knowledge to other portfolio companies. We study the costs and benefits of these two forms of knowledge transfer, and their implications for investment, innovation, and product market competition. The model also sheds light on the choice between venture capital and other forms of finance, and the determinants of the decision to seek patent protection for innovations. Our analysis provides a rationale for the use of contingencies (specifically, patent approval) in VC contracts documented by Kaplan and Stromberg (2003), and for recent evidence on patterns of syndication among venture capitalists.

Item Type: Monograph (Working Paper)
Language: English
Date: February 2015
Uncontrolled Keywords: venture capital, knowledge intermediaries, contracts, innovation, competition, patents
JEL codes: D82 - Asymmetric and Private Information
D86 - Economics of Contract - Theory
G24 - Investment Banking; Venture Capital; Brokerage; Ratings and Ratings Agencies
L22 - Firm Organization and Market Structure - Markets vs. Hierarchies; Vertical Integration; Conglomerates; Subsidiaries
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 16 Mar 2015 14:56
Last Modified: 07 Mar 2018 13:23
OAI ID: oai:tse-fr.eu:29010
URI: http://publications.ut-capitole.fr/id/eprint/16698

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