Facilitating early stage internationalization through knowledge sharing. Venture capital firm's influence on new venture internationalization

Abstract

When venture capital firms invest in new ventures the objective is to ensure high returns on the investment made by fuelling new ventures to grow and become considerable actors on the international market. The role of knowledge sharing has been highlighted as a strategically important way of developing new venture's capabilities and building foundations for internationalization. However, the area lacks research from a venture capital perspective and the non-financial value added in the post-investment process. This thesis aims to further investigate how the process of knowledge sharing can facilitate early stage internationalization in an investment relationship. Through a case study of Sweden’s most active investor in early growth ventures and four of its new ventures the study found that the investment relationship facilitates early stage internationalization through formation of core business, establishment of first nodes of foreign presence and increasing the chances of network insidership for new ventures. Moreover, it was found that different dimensions of knowledge, tacit and explicit, are of importance depending on the maturity level of an investment relationship. It was also found that an investment relationship shortens new venture's process of reaching the next step of development through knowledge sharing and that the shared knowledge also accelerates the development process as the development steps can become longer. However, knowledge sharing decreases over time as new ventures' knowledge base grows and their reference point shifts.