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PARTNERSHIP VERSUS CORPORATION: UNTANGLING THE GOVERNANCE DILEMMA OF CORPORATE VENTURE CAPITALDownload This Article
This brief research note discusses the role of organizational and governance design in a specific sector, namely the Corporate Venture Capital (CVC). This specific segment of the venture capital industry has so far proved to be at least as successful as venture capital investments carried out by “independent” or “pure” players, but corporate-sponsored initiatives tend to be more short-lived, cyclical and unstable. Unlike traditional venture capital funds, CVC established by corporations usually seek both financial returns and “strategic” benefits. We discuss the dilemma faced by corporations setting-up CVC programs in terms of governance design and ownership arrangements, showing that strategic and financial performances are unlikely to be conjointly maximized, thus leading to the inherent instability of such programs.
Keywords: Corporate Governance, Ownership Structure, Organizational Design, Agency Theory, Corporate Venture Capital
How to cite this paper: Gianfrate, G., & Zanetti, L. (2008). Partnership versus corporation: untangling the governance dilemma of corporate venture capital. Corporate Ownership & Control, 6(1-2), 263-267. https://doi.org/10.22495/cocv6i1c2p2