The role of corporate venture capital and of geographical location on startups’ successful exit

: the case of artificial intelligence and information technology startups

Abstract

Corporate Venture Capital (CVC) is a diffused practice among incumbents, funding startups to exploit synergies. CVC is increasingly oriented towards funding new emerging disruptive technologies: the current Digital Era calls for innovating and keeping up with the contextual evolution. Among the new Information Technology (IT) solutions, Artificial Intelligence (AI) is catalyzing the new disruptive context. AI can indeed find a broad scope of application across business functions and industries. Previous literature has analyzed the emergence of CVC practice within the IT and AI context. However, this study aims to add new elements to previous research, deeply exploring the relationship between CVC and AI startups and measuring the extent to which this relationship impacts on startups9 successful exit, while accounting for the degree of innovation of startups9 locations, also expected to contribute to startups9 success. Indeed, startups9 success also depends on their qualities and on the ecosystem in which are located; more active ecosystems may offer more innovation opportunities. The Hypotheses are tested on a sample of 108,441 investments allocated on 39,502 AI startups, founded between 2000 and 2019; the startups are located among 183 Countries, assigned with innovation indices, according to the Global Innovation Index by the World Intellectual Property Organization. We find that the degree of innovation of AI startups9 location significantly and positively impacts the startups9 probability to succeed, moving from less to more innovative areas. Moreover, CVC9s presence significantly and positively impacts AI startups9 probability of successful exit too. CVC investments contemporarily positively moderate the location effect.

Date of Award	15 Oct 2024
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Filipa de Almeida (Supervisor)