Dushnitsky and Shaver (2009) found that entrepreneurial ventures are less likely to partner and disclose their technology to corporate venture capitalists (CVC) in the same industry when that industry is characterized by a weak intellectual property regime. As a result, entrepreneurial ventures are caught in a paradox of whether to disclose or conceal their intellectual property when CVC support is needed. We propose that CVC programs can overcome this ‘paradox of disclosure’ (Arrow, 1962) with entrepreneurial ventures by establishing a credible commitment to a CVC program. Commitments are credible if they have been continuously demonstrated over time (North, 1993). We suggest that CVC programs can demonstrate a credible commitment based on their prior activity and continuity of their CVC program. Prior CVC activity and continuity would cultivate trust in otherwise fragile relationships characterized by lack of legal recourse and marginal intellectual property protection systems.
Sears, Josh; Mcleod, Michael; Evert, Robert; and Payne, G. Tyge
"CREDIBILITY IN CORPORATE VENTURING: EXAMINING RELATIONSHIPS BETWEEN ENTREPRENEURS AND CORPORATE VENTURE CAPITALISTS (SUMMARY),"
Frontiers of Entrepreneurship Research: Vol. 35
, Article 16.
Available at: http://digitalknowledge.babson.edu/fer/vol35/iss2/16