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  • April 2022
  • Article
  • Academy of Management Journal

The Past Is Prologue? Venture-Capital Syndicates' Collaborative Experience and Start-Up Exits

By: Dan Wang, Emily Cox Pahnke and Rory M. McDonald
  • Format:Print
  • | Pages:32
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Abstract

Past research has produced contradictory insights into how prior collaboration between organizations—their relational embeddedness—impacts collective collaborative performance. We theorize that the effect of relational embeddedness on collaborative success is contingent on the type of success under consideration, and we develop a typology of two kinds of success. We test our hypotheses using data from Crunchbase on a sample of almost 11,000 U.S. start-ups backed by venture-capital (VC) firms, using the VCs’ previous collaborative experience to predict the type of success that the start-ups will experience. Our findings indicate that, as prior collaborative experience within a group of VCs increases, a jointly funded start-up is more likely to exit by acquisition (which we call a focused success); with less prior experience among the group of VCs, a jointly funded start-up is more likely to exit by IPO (a broadcast success). Our results deepen understanding of the connections between organizational performance and collaboration networks, contributing to entrepreneurship research on the role of investors in technology ventures.

Keywords

Inter-organizational Networks; Collaboration; Entrepreneurship; Networks; Organizations; Performance; Venture Capital

Citation

Wang, Dan, Emily Cox Pahnke, and Rory M. McDonald. "The Past Is Prologue? Venture-Capital Syndicates' Collaborative Experience and Start-Up Exits." Academy of Management Journal 65, no. 2 (April 2022): 371–402.
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About The Author

Rory M. McDonald

Technology and Operations Management
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More from the Authors
  • Shaping Nascent Industries: Innovation Strategy and Regulatory Uncertainty in Personal Genomics By: Cheng Gao and Rory McDonald
  • How Leaders with Divergent Visions Generate Novel Strategy: Navigating the Paradox of Preservation and Modernization in Swiss Watchmaking By: Ryan Raffaelli, Rich DeJordy and Rory M. McDonald
  • A Spanner in the Works: Category-Spanning Entrants and Audience Valuation of Incumbents By: Rory M. McDonald and Ryan T. Allen
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