Technology and Market Relatedness of Corporate Venture Capital Investments at the Portfolio Level

Corporate venture capital (CVC) is being used increasingly by established firms for exploring emerging technologies. Prior studies show that a CVC investor’s innovation performance peaks when the investor-investee dyad exhibits moderate technology relatedness. Unlike at the dyad level, we demonstrate that at the portfolio level, technology relatedness exerts a negative impact on the investor’s exploratory innovation performance, while an increase in market relatedness exacerbates the relationship. Investors should consider portfolio-level relatedness of their CVC relationships within both technology and market domains.