2012/07/26 by Ümit Özmel, Jeffrey J. Reuer, Ranjay Gulati · 2 citations
Business, Management and Accounting · Economics, Econometrics and Finance · #Private Equity and Venture Capital #Innovation and Knowledge Management #Capital Investment and Risk Analysis #Syndicate #Alliance #Venture capital #Business #New Ventures #Industrial organization #Affect (linguistics) #Social venture capital #Value (mathematics) #Position (finance) #Marketing #Strategic alliance #Entrepreneurship #Finance #Sociology
paper · doi:10.5465/amj.2009.0549
openalex publication_date 2012/07/26 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/31
In this article, we examine the contingent effects of signals generated by different types of networks on new ventures' formation of future strategic alliances. We argue that the signaling value of a given tie in reducing adverse selection is more pronounced when another type of tie is lacking. In particular, we suggest that signals associated with (i) a new venture's affiliations with venture capitalists (VCs) that have prominent positions in syndicate networks and (ii) a new venture's prominent position in alliance networks resulting from previous alliances offer redundant benefits. As a result, the positive effect of VC prominence in determining a new venture's future alliance formation diminishes as the new venture's prominence in alliance networks increases. Evidence from biotech alliances between new ventures and established companies provides support for our theory.