The Sustainable Growth and Strategic Investment Strategy of Venture Firms

We profoundly explores venture’s strategic options by scrutinizing four questions concerning on its sustainable growth of ventures taking venture’s initial lack in resources into consideration. First, ventures are more inclined to pursue a do-it-alone strategy when its outside option is to collaborate with a partner, i.e. joint venture. Alternatively speaking, those ventures with innovative idea do not naturally want to be interrupted by partners. Second, transaction cost embedded in joint venture induces ventures to pursue the do-it-alone strategy. Also, the larger the size of venture project is, the more likely entrepreneurs choose a joint venture strategy. This result highlights how risk sharing occurs. No matter what innovative idea is payable, there exits a generic risk of project failure. The higher the risk is, entrepreneurs are inclined to share business risks. Third, venture’s reliance on external funding source depends on the venture’s capability to recover the external funding indeed. Fourth, we consider three strategies: “pursue a do-it-alone strategy with external funding,” “pursue a do-it-alone Strategy without external funding,” and “create a joint venture.” Venture’s strategic choice depends on the mixture between how much they are owed from external funding source and their expected profits.