Abstract:
Powerful long-established players desperately chase disruptive ventures yearning to grab a piece of their bespoke innovation. Investing billions in them, in the form of Corporate Venture Capital (CVC) funds, corporations want to know how to enhance synergies, increase returns and guarantee foreseeable progress.
The present master thesis examines the factors underlying that progress and how successful CVC-backed companies in Europe are. The research attempts to shed light on a mixture of qualitative and quantitative determinants for successful CVC exits – defined as Initial Public Offering, merger or acquisition. Aspects behind the widely spread notion that CVCs fail to „scout the next unicorn” are covered as well.
The author defines eight independent variables, hypothesizing their correlation with the successful exits. Given the dichotomous nature of the test, logit/probit and supporting statistical models are employed. Results show that over the defined 24-year period the number of financing rounds, the size of CVC investment and investor experience express strongest correlation to the outcome of an investment. Most of the deals are closed in the high-tech and semi-conductors industry in the busiest by far country - Germany, shadowed by the UK and France. Overall, slightly above 35% of the CVC-backed companies reach one of the three success stages.
