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Strategic alliances, venture capital, and exit decisions in early stage high-tech firms

Publication ,  Journal Article
Ozmel, U; Robinson, DT; Stuart, TE
Published in: Journal of Financial Economics
March 1, 2013

We study the trade-offs that biotech start-ups face in the private equity market when they choose between raising firm-level capital from venture capitalists or project-level capital from strategic alliance partners. Increased alliance activity makes future alliances more likely, but future VC activity less likely. In contrast, venture capital (VC) activity makes both future alliance and future VC activity more likely. Both types of private capital raise the hazard of going public. Acquisition as an alternative to initial public offering is made more likely by increased VC activity, but the link between acquisition probabilities and alliance activity is less clear-cut. These results highlight both the importance of alliance partners in resolving asymmetric information problems in the capital acquisition process and the potential conflict of interest between different sources of private equity. © 2012.

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Published In

Journal of Financial Economics

DOI

ISSN

0304-405X

Publication Date

March 1, 2013

Volume

107

Issue

3

Start / End Page

655 / 670

Related Subject Headings

  • Finance
  • 3801 Applied economics
  • 3502 Banking, finance and investment
  • 1606 Political Science
  • 1502 Banking, Finance and Investment
  • 1402 Applied Economics
 

Citation

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Ozmel, U., Robinson, D. T., & Stuart, T. E. (2013). Strategic alliances, venture capital, and exit decisions in early stage high-tech firms. Journal of Financial Economics, 107(3), 655–670. https://doi.org/10.1016/j.jfineco.2012.09.009
Ozmel, U., D. T. Robinson, and T. E. Stuart. “Strategic alliances, venture capital, and exit decisions in early stage high-tech firms.” Journal of Financial Economics 107, no. 3 (March 1, 2013): 655–70. https://doi.org/10.1016/j.jfineco.2012.09.009.
Ozmel U, Robinson DT, Stuart TE. Strategic alliances, venture capital, and exit decisions in early stage high-tech firms. Journal of Financial Economics. 2013 Mar 1;107(3):655–70.
Ozmel, U., et al. “Strategic alliances, venture capital, and exit decisions in early stage high-tech firms.” Journal of Financial Economics, vol. 107, no. 3, Mar. 2013, pp. 655–70. Scopus, doi:10.1016/j.jfineco.2012.09.009.
Ozmel U, Robinson DT, Stuart TE. Strategic alliances, venture capital, and exit decisions in early stage high-tech firms. Journal of Financial Economics. 2013 Mar 1;107(3):655–670.
Journal cover image

Published In

Journal of Financial Economics

DOI

ISSN

0304-405X

Publication Date

March 1, 2013

Volume

107

Issue

3

Start / End Page

655 / 670

Related Subject Headings

  • Finance
  • 3801 Applied economics
  • 3502 Banking, finance and investment
  • 1606 Political Science
  • 1502 Banking, Finance and Investment
  • 1402 Applied Economics