Mind the Gales: An attention-based view of startup investment arms

This dissertation takes the corporate perspective, and seeks to understand inconsistencies in decision making enacted by corporate venture capital (CVC) investment units. CVC units are often portrayed as rational instruments deployed to obtain corporate innovation and to achieve renewal goals, by gaining privileged access to external startups’ knowledge resources. However, the dissertation proposes a behavioral framework, based on the attention-based view, that demonstrates how the selective attention of CVC units subsequently affects the availability of particular organizational moves. This implies that certain issues and answers are (deliberately or non-deliberately) attended to, while others are ignored. Patterns of selective attention in conjunction with sequential decision-making processes signify that future decisions or organizational moves are highly dependent on the attentional structures of prior decisions. The first study of the dissertation explains why the observed variance in a CVC unit’s selective focus of attention (measured as variance in evaluation durations) results from the unit’s interpretation of a corporate firm’s renewal goals. The second study explains how a CVC unit’s investment behavior can slow down (measured as the number of investments), no matter how many prospective external opportunities are scouted through syndication networks. Finally, the third study explains how CVC units differ in their abilities to transfer and integrate external knowledge embedded in their CVC portfolios. Altogether, the dissertation highlights behavioral characteristics of corporate innovation, and in particular, how CVC units’ selective focus of attention is conditioned by social and emergent factors that in turn shape the particular set of opportunities that a corporate firm can use in pursuit of innovation and strategic renewal.