Location
260-051, Owen G. Glenn Building
Start Date
12-15-2014
Description
We investigate the role of venture capitalists (VCs) in the creation of new technological ecosystems and in particular examine how VCs facilitate new ventures’ product development decisions to use new technological platforms. Focusing on the recent rapid rise of a new computing paradigm, cloud computing, we develop and test a set of hypotheses based on a 1999-2009 sample of start-up firms that offer enterprise software products. We find evidence of strong complementarity between VC financing and the introduction of new products offered over the cloud. Moreover, the complementarity effects are significantly stronger for firms backed by VCs that had rich experience in the IT industry and are significantly weaker for firms that had prior experience developing traditional client/server products.
Recommended Citation
Breznitz, Dan; Forman, Chris; and Wen, Wen, "The role of venture capitalists in the formation of new technological trajectories: Evidence from the Cloud" (2014). ICIS 2014 Proceedings. 31.
https://aisel.aisnet.org/icis2014/proceedings/ISStrategy/31
The role of venture capitalists in the formation of new technological trajectories: Evidence from the Cloud
260-051, Owen G. Glenn Building
We investigate the role of venture capitalists (VCs) in the creation of new technological ecosystems and in particular examine how VCs facilitate new ventures’ product development decisions to use new technological platforms. Focusing on the recent rapid rise of a new computing paradigm, cloud computing, we develop and test a set of hypotheses based on a 1999-2009 sample of start-up firms that offer enterprise software products. We find evidence of strong complementarity between VC financing and the introduction of new products offered over the cloud. Moreover, the complementarity effects are significantly stronger for firms backed by VCs that had rich experience in the IT industry and are significantly weaker for firms that had prior experience developing traditional client/server products.