Katila et al. (2008) "Swimming with sharks: Technology ventures, defense mechanisms and corporate relationships
34 important questions on Katila et al. (2008) "Swimming with sharks: Technology ventures, defense mechanisms and corporate relationships
What is the sharks dilemma?
What is the fundamental tension entrepreneurs face when considering forming relationships?
- On the one hand, they are pushed towards forming relationships by their dependence on others for needed resources
- On the other hand, they are pushed away from relationships by concerns about possibly damaging misappropriation of their own resources by their partners
What is the principal approach for explaining when firms form inter-organizational relationships and social network theory
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In which way does social network theory complement resource dependence theory?
Which two research streams does this paper follow?
- Venture capital
- Corporation as an investor
Why do ventures enter relationships with VCs? (VC)
What is the advantage for firm to form investment relationships with VCs?
- They grow faster
- Have better reputations
- Gain more introductions to potential alliance partners
- Are more likely to attain an initial public offering (IPO)
Where do VCs typically contribute to?
- Financial resources
- Legitimacy
- Advice
- Referrals for executive hires
- Industry connections
Why is misappropriating the resources of new firms reasonably low?
What happens because the corporation is the dominant partner in the relationship?
When are established firms more likely to enter an investment relationship with a new firm and benefit from it?
- When they can easily absorb technology because the venture's technology is related to their own
- The patent regime of the venture's industry is weak
- When the venture's technology is novel and significant
Why are corporate investors not as powerful as might be anticipated?
What about complementary resources?
What about resource hierarchy?
What may complementary resources enable the corporate partner to?
Why are complementary resources especially for manufacturing more likely to propel relationship formation than needs for financial resources?
What are the defense mechanisms?
- Patent defense
- Secrecy defense
- Timing defense
- Defense hierarchy
What happens when misappropriation of a firms' resources is successful?
Why are new firms at a particular risk of losing their technology resources?
What about patent defense?
What about secrecy defense?
Why should new firms be better able to protect their technological inventions and be more likley to enter into corporate investment relationships when the trade secret regime in their industry is strong?
What about timing defense?
Why are new firms therefore more likley to pursue corporate investment relationships in later funding rounds?
Why is timing also an effective defense mechanism?
What about defense hierarchy?
Why may corporations be less deterred by trade secrets?
Both parties may prefer timing as a defense mechanism.. Why?
Why may new firms prefer timing as a defense mechanism?
What do the authors propose regarding integrating needs and defense mechanisms?
When do firms enter into corporate investment relationships from a cooperative perspective?
When do firms enter into corporate investment relationships from a competitive perspective?
When do new firms swim with sharks?
What are the three key points?
- Executives anticipate the uncertainty of maintaining the dependence of their partners and their own power created by the potential for misappropriation
- They form ties when defense mechanisms are available to lower this uncertainty
- Defense mechanisms are a focal weapon by which firms sustain their power in relationships
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