Why Corporate Venture Capital Funds Fail: Evidence from the European Energy Industry

Abstract

Corporate venture capital (CVC) is an important concept for large firms to manage innovation. CVC has been pioneered by major companies in the information technology, telecommunications and pharmaceutical industries. In 1999-2001, many large energy companies had launched CVC funds. In the most recent past, however, many energy companies have discontinued their activities, leading to what might be called the 'sudden death syndrome' of CVC in this industry. Our qualitative research suggests that one factor that has played an important role in the failure of CVC funds, and has largely been overlooked in previous research, is parent firm organisational culture. We develop a conceptual model that explains the relationship between organisational culture and CVC fund survival, including the moderating roles of decision-making practices in organisations and parent firm skills in managing and measuring success. Our findings are based on 27 qualitative in-depth interviews with corporate and independent VCs in the energy industry.

Greening Goliaths versus emerging Davids — Theorizing about the role of incumbents and new entrants in sustainable entrepreneurship

“…All major electricity utilities have, for example, launched some kind of tariff that promises their clients electricity from environmentally preferable sources (Bird et al, 2002;Delmas et al, 2007). Incumbents may also decide to launch corporate venture capital (CVC) funds to keep an eye on innovating Davids (Teppo and Wüstenhagen, 2010). This provides them with an option to integrate sustainability innovation when it turns out to be disruptive.…”

Why fintechs cooperate with banks—evidence from germany

“…Hence, we selected resources as the viewpoint of our study to provide new insights in the field of fintech-bank cooperation. The conceptual framework emerged as a result of our data analysis (Teppo and Wüstenhagen, 2009). The dependent variable of our research is the cooperation between fintechs and banks.…”

Venture Capital Investment in the Greentech Industries: A Provocative Essay

“…Teppo and Wüstenhagen (2009) find that many corporate venturers, particularly the energy companies that began operations between 1999-2002 had discontinued their operations. They attribute this to a clash between the VCs and their parent firm's organizational cultures.…”