Two essays on the role of marketing in new venture investments

The dissertation focuses on understanding the role of marketing in the venture capital market, specifically regarding the role of marketing in ventures and venture capital investments. The first chapter specifically focuses on the effects of branding efforts on early-stage ventures’ first-round financing performance. Drawing on signaling theory, this chapter proposes that when ventures invest in branding efforts, that investment can effectively reflect their underlying marketing capabilities and thus reduce the information asymmetry between investors and ventures. As a result, investors will perceive better organizational legitimacy and thus be more willing to invest in these ventures. In addition, the study theorizes and examines a set of boundary conditions, including investor strategic orientation and venture environmental context, on the signaling role of venture branding efforts. The second chapter adopts the corporate investors’ perspective and examines the impacts of the innovation of acquired entrepreneurial ventures on the innovativeness rejuvenation of corporate investors through the lens of acculturation theory. As they mature, some firms gradually lose their funding innovativeness and become conservative due to a variety of reasons. Given the importance of innovation, this diminished innovativeness could cause competitive disadvantages for firms in a fast-changing environment. Additionally, chapter II proposes a managerially actionable means for mature firms to rejuvenate their innovativeness. I suggest that by acquiring entrepreneurial ventures and forming an intercultural relation, established firms can re-expose themselves to an innovation-prone entrepreneurial culture and could potentially rejuvenate their innovativeness. I also examine the role of both parties’ CEO power in the innovation transplanting process, using agency theory and upper echelons theory.