Does technological knowledge transfer from CVC investor firms to venture firms? An examination of CVC investments, venture firm technological learning, and IPO

The extant literature on corporate venture capital (CVC) investments has overwhelmingly viewed CVC success through the lens of the CVC investor firm, leaving the venture firm's perspective limitedly explored. We demonstrate that venture firms not only learn technologically from CVC investor firms but that the technological knowledge is positively associated with an IPO exit by the venture firm. We additionally observe that the technological learning partially mediates the relationship between accepting a CVC investment and an exit by IPO. Our sample comprises 171 dyads consisting of a venture firm and the CVC investor firm that has made the CVC investment. We compare this against a matched pair sample of another 171 venture firms that have not received any CVC investment. Patent prior art citations are used to track the flow of technological knowledge from the CVC investor firm to the venture firm. Our research makes a novel contribution to the extant CVC literature by shedding light on venture firm's technological learning, which increases the probability of an IPO exit by the venture firm.