Venture Boards: The Impact of CVC-Directors on Venture Innovation

Using hand-collected longitudinal data on venture boards, we examine their impact on new venture innovation in the medical device industry. Putting the spotlight on CVC-directors, we find a higher proportion of CVC directors on the venture board has a significant positive effect on venture’s knowledge quality, but a significant negative effect on product introductions in the market. These effects are moderated by the proportion of inside directors, and other (i.e., non-CVC) outside directors who have either been CEOs or have had founding experience. While broadly consistent with the so-called “sharks dilemma” associated with CVC investment in new ventures, our study underscores the distinction between venture directors and venture investors.