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Entrepreneurial ventures are a key source of innovation. Nowadays, ventures are backed by a wide array of investors whose complementary asset profiles differ significantly. We therefore assert that entrepreneurial ventures can no longer be studied as a homogeneous group. Rather, we harness the inherent dichotomy in the profiles of independent VCs and corporate investors to study ventures' innovation outcomes. Our sample consists of 545 U.S. biotechnology ventures founded between 1990 and 2003 and backed by independent venture capitalists (VCs) or corporate VCs (CVC). We find CVCs' investees exhibit higher rates of innovation output, compared to independent VC-backed peers. Moreover, the performance of CVC-backed ventures is sensitive to their ability to leverage corporate assets, underscoring the role of CVC accessibility and FDA approval requirements as the mechanisms associated with CVC contribution.

We show that venture capitalists' (VCs) on-site involvement with their portfolio companies leads to an increase in both innovation and the likelihood of a successful exit. We rule out selection effects by exploiting an exogenous source of variation in VC involvement: the introduction of new airline routes that reduce VCs' travel times to their existing portfolio companies. We confirm the importance of this channel by conducting a large-scale survey of VCs, of whom almost 90% indicate that direct flights increase their interaction with their portfolio companies and management, and help them better understand companies' activities.

Drawing on institutional theory, we examine how the institutional logics—taken-for granted norms, structures, and practices—of different types of funding partners influence young firms and their search for innovations. We test our hypotheses in a longitudinal study of a complete population of ventures in the minimally invasive surgical device industry in the U.S., supplemented by interviews with industry informants. We find that types of funding partners vary significantly from one another: they all provide resources, but their institutional logics differ. Venture capitalists (VCs) pick young firms with significant patented technologies and help firms launch products, and high-status VCs strengthen both the patenting and product innovations of young firms. Corporate venture capitalists and government agencies also select patent-intensive firms but are less effective than VCs in helping ventures during the relationship because, though these partners often have impressive technical and commercial resources for innovation, their institutional logics constrain how effectively young firms can access their resources. Relative to other types of funding partners, VCs have a closer advisor relationship with the venture; greater power, influence, and access to resources; better-paced and more-motivating milestones; and better understanding of the commercialization process. Our results extend the institutional logics literature to interorganizational relationships and suggest that the choice among types of funding partners may have unanticipated effects on firms' innovation beyond the financial resources gained through the relationship.

We examine how entrepreneurs acquire financial resources for their early-stage ventures from distributed non-professionals via crowdfunding. Through an inductive analysis of entrepreneurs’ successful and unsuccessful non-equity crowdfunding campaigns, we derive a holistic framework of community-based resource mobilization. Our framework consists of three distinct processes entrepreneurs use to attain financial capital from non-professional resource providers over time: community building to establish psychological bonds with individuals possessing domain-relevant knowledge, community engaging to foster social identification with existing resource providers, and community spanning to leverage proofpoints with intermediaries who can help orchestrate resource mobilization with broader audiences. Entrepreneurs’ enactment and temporal sequencing of these three processes distinguish successful versus unsuccessful resource mobilization efforts in a crowdfunding setting. Community building is used by successful entrepreneurs primarily prior to a campaign’s launch, community engaging is used throughout a campaign, and community spanning is most effectively used after achieving a campaign’s initially-stated funding goal. This study empirically illustrates and theoretically conceptualizes the dynamics of resource mobilization in a crowdfunding setting.

In fields as diverse as technology entrepreneurship and the arts, crowds of interested stakeholders are increasingly responsible for deciding which innovations to fund, a privilege that was previously reserved for a few experts, such as venture capitalists and grant-making bodies. Little is known about the degree to which the crowd differs from experts in judging which ideas to fund, and, indeed, whether the crowd is even rational in making funding decisions. Drawing on a panel of national experts and comprehensive data from the largest crowdfunding site, we examine funding decisions for proposed theater projects, a category where expert and crowd preferences might be expected to differ greatly. We instead find significant agreement between the funding decisions of crowds and experts. Where crowds and experts disagree, it is far more likely to be a case where the crowd is willing to fund projects that experts may not. Examining the outcomes of these projects, we find no quantitative or qualitative differences between projects funded by the crowd alone and those that were selected by both the crowd and experts. Our findings suggest that crowdfunding can play an important role in complementing expert decisions, particularly in sectors where the crowds are end users, by allowing projects the option to receive multiple evaluations and thereby lowering the incidence of “false negatives.” This paper was accepted by Lee Fleming, entrepreneurship and innovation .

Entrepreneurship research is on the rise but many questions about the fundamental nature of entrepreneurship still exist. We argue that entrepreneurship is about experimentation; the probabilities of success are low, extremely skewed, and unknowable until an investment is made. At a macro level, experimentation by new firms underlies the Schumpeterian notion of creative destruction. However, at a micro level, investment and continuation decisions are not always made in a competitive Darwinian contest. Instead, a few investors make decisions that are impacted by incentive, agency, and coordination problems, often before a new idea even has a chance to compete in a market. We contend that costs and constraints on the ability to experiment alter the type of organizational form surrounding innovation and influence when innovation is more likely to occur. These factors not only govern how much experimentation is undertaken in the economy, but also the trajectory of experimentation, with potentially very deep economic consequences.

We ask how social similarity between start-up founders and venture capitalists (VCs) influences VCs’ pricing decisions and returns on investments. We conceptualize how regional and caste similarity, two salient aspects of social similarity in India, affect two distinct aspects of deal pricing: premoney valuation and investors’ downside risk protection in the Indian venture capital market. We theorize that VCs reflect the benefits and costs of social similarity by setting higher premoney valuation when investing in companies led by socially similar founders while also minimizing their downside risks in these investments. We expect that social similarity’s impact on pricing is amplified when VCs face greater subjective uncertainty, such as for early-stage deals or if the VCs lack expertise in the start-up company’s product market. Finally, we claim that VCs achieve superior returns on investments when their deal pricing accurately reflects the impact of social similarity. We tested our conceptual model using both parametric and nonparametric methods on a hand-collected data set of all deals that occurred during 2005–2012, and we supplemented our analyses with in-depth, qualitative interviews that contextualize our findings. The pattern of findings on regional similarity are consistent with our model, but the effects of caste in our data are theoretically anomalous. Post hoc analyses to resolve the anomaly suggest an “intrinsic quality” mechanism, whereby higher-caste VCs set higher valuations when matching with lower-caste founders that signal high quality. Overall, our findings offer evidence that VCs incorporate social attributes into deal pricing in nuanced yet boundedly rational ways.

This paper investigates whether individual venture capitalists have repeatable investment skill and the extent to which their skill is impacted by the venture capital (VC) firm where they work. We examine a unique data set that tracks the performance of individual venture capitalists' investments over time and as they move between firms. We find evidence of skill and exit style differences even among venture partners investing at the same VC firm at the same time. Furthermore, our estimates suggest the partners' human capital is two to five times more important than the VC firm's organizational capital in explaining performance.

BACKGROUNDThe effects of the novel coronavirus disease 2019 (COVID-19) in pregnancy remain relatively unknown. We present a case of second trimester pregnancy with symptomatic COVID-19 complicated by severe preeclampsia and placental abruption.METHODSWe analyzed the placenta for the presence of severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) through molecular and immunohistochemical assays and by and electron microscopy and measured the maternal antibody response in the blood to this infection.RESULTSSARS-CoV-2 localized predominantly to syncytiotrophoblast cells at the materno-fetal interface of the placenta. Histological examination of the placenta revealed a dense macrophage infiltrate, but no evidence for the vasculopathy typically associated with preeclampsia.CONCLUSIONThis case demonstrates SARS-CoV-2 invasion of the placenta, highlighting the potential for severe morbidity among pregnant women with COVID-19.FUNDINGBeatrice Kleinberg Neuwirth Fund and Fast Grant Emergent Ventures funding from the Mercatus Center at George Mason University. The funding bodies did not have roles in the design of the study or data collection, analysis, and interpretation and played no role in writing the manuscript.