Gary Dushnitsky - Faculty Research in Knowledge@Wharton

Want to Crank Up Corporate Venture Capital Performance? Consider Matching Independent VC Pay Packages

Wed, 26 Nov 2008 12:18:24 EST

Big firms launch venture capital units to help keep their competitive edge. But to be successful, they must set up the right incentive packages for their VC staff -- not a trivial task. Firms often structure internal VC staff salaries the same way they compensate corporate staffers not charged with taking such risk, says Wharton management professor Gary Dushnitsky. These firms should consider compensating their internal VCs like independent VCs, giving them a stake in the future returns of the ventures in which they invest, Dushnitsky says in a new research paper.

Venture Capital Firms Set Their Sights on New Ideas -- Not New Technologies

Wed, 08 Aug 2007 15:43:21 EST

Fast-growing social networking site Facebook and mobile messaging service Twitter didn't introduce break-through technologies, but they have become phenomenal success stories nonetheless. Increasingly, "web 2.0" companies like these are altering the traditional venture capital formula, which used to count technology differentiation as a key requirement when evaluating new targets. In many cases, technology has become a commodity, but a big idea can go a long way provided there's a rapidly growing audience. As VC firms look for new investments, several questions come into play: How should companies be evaluated when they rely on technology that is easily replicated? How much value does a big audience carry? What is the preferred exit strategy? Wharton faculty and VC experts weigh in on these and other questions.

How Corporate Venture Capital Investing Increases Innovation

Wed, 19 Oct 2005 16:43:39 EST

After the dot-com bubble burst five years ago, corporate-sponsored venture capital funds jumped off that bandwagon in droves. Some companies were restructured; others decided these funds didn't have much of an impact on their bottom lines. But Wharton management professor Gary Dushnitsky argues that venture capital is an essential tool for corporations to increase their innovativeness. As more and more new technologies spring up, he says, "large corporations recognize they no longer have a monopoly on the next big thing. They need a tool to scan, identify, and leverage or harness entrepreneurial or innovative technologies" developed by others. Dushnitsky and a colleague explore this issue in four related papers.