This paper investigates the relationship between corporate venture capital (CVC) investments and start-ups’ innovation activity. Using a dataset of 240 CVC investors from Europe and North America and more than 44 000 start-ups located globally, the analysis shows that CVC investors target technology-intensive start-ups with large patent portfolios, particularly in high-digital-intensity sectors. After the first investment, the innovation intensity of CVC-financed start-ups decreases relative to start-ups financed by other VC investors, particularly when the corporates are from high-digital-intensity sectors. At the same time, CVC-financed start-ups receive more citations on their patents and are more likely to get acquired, even though not by the same corporation making the CVC investment. The study discusses potential explanations for these differences, including the increasing globalisation and digitalisation of entrepreneurial ecosystems, and the role of dominant players in high-digital-intensity sectors.
