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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 McDonald
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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 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
  • Disrupting Defense at Anduril Industries By: Rory McDonald, Timothy Buehn, Aditi Ghai and James Heffelfinger
  • Productive Tensions: How Every Leader Can Tackle Innovation's Toughest Trade-Offs By: Chris Bingham and Rory McDonald
  • Managing Innovation at Atrium Health: 'Never Let a Good Crisis Go To Waste' By: Derek van Bever, Rory McDonald and Anibha Singh
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