The role of strategic alliances in VC exits: evidence from the biotechnology industry
Journal
Venture Capital
Type
journal article
Date Issued
2020-08-20
Author(s)
Abstract
n this study, we analyze the impact of strategic alliances on VC exits. We explicitly ask whether strategic alliances may serve as a certifying device for new potential investors and whether the role alliances play differs in IPO and M&As. We hypothesize that strategic alliances serve as a certifying device particularly in instances with many uninformed buyers (IPOs) but not when there is a single buyer (M&As). To empirically test this hypothesis, we draw on a sample of 663 US VC-backed biotechnology companies founded between 2004 and 2008. We explicitly control for observed and unobserved heterogeneity in our cohort sample, alleviate concerns relating to self-selection into alliance activity, and assuage methodological concerns with respect to censoring. Our findings suggest that alliances improve the probability of successful exits for IPOs, but not for M&As. Moreover, we find a smaller effect than prior studies do.
Language
English
Keywords
Strategic Alliance
Venture Capital
Biotechnology
IPO
M&A
HSG Classification
contribution to scientific community
HSG Profile Area
SOF - System-wide Risk in the Financial System
Refereed
Yes
Number
22(3)
Start page
281
End page
313
Pages
32
Subject(s)
Division(s)
Eprints ID
262799
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The role of strategic alliances in VC exits evidence from the biotechnology industry-2.pdf
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807.69 KB
Format
Adobe PDF
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