The role of strategic alliances in VC exits: evidence from the biotechnology industry

Brinster, Leonhard; Hopp, Christian; Tykvová, Tereza (2020). The role of strategic alliances in VC exits: evidence from the biotechnology industry Venture Capital, 22(3), pp. 281-313. Taylor & Francis 10.1080/13691066.2020.1814192

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In 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.

Item Type:	Journal Article (Original Article)
Division/Institute:	Business School > Institute for Applied Data Science & Finance Business School > Institute for Applied Data Science & Finance > Finance, Accounting and Tax Business School > Institute for Applied Data Science & Finance > Applied Data Science Business School
Name:	Brinster, Leonhard; Hopp, Christian0000-0002-4095-092X and Tykvová, Tereza
Subjects:	H Social Sciences > HG Finance
ISSN:	1369-1066
Publisher:	Taylor & Francis
Language:	English
Submitter:	Christian Hopp
Date Deposited:	17 Aug 2022 09:43
Last Modified:	17 Aug 2022 09:43
Publisher DOI:	10.1080/13691066.2020.1814192
Uncontrolled Keywords:	Strategic alliance; venture capital; biotechnology; IPO; M&A
ARBOR DOI:	10.24451/arbor.17287
URI:	https://arbor.bfh.ch/id/eprint/17287