Revenue and Knowledge Cooperation Mechanisms between Business Incubators and Venture Capitalists for Collaborative Start-Ups
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Date
2017-08
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Publisher
Scientific Research
Abstract
Business incubators and venture capital are effective instruments for supporting
the development of new firms. The purpose of this paper is to explore cooperation
mechanisms between business incubators and venture capitalists
and find the equilibriums of the mechanisms. Also, this paper puts forward
three mechanisms, revenue sharing mechanism, cost sharing mechanism and
knowledge sharing mechanism, to discuss the cooperation between business
incubators and venture capitalists. Meanwhile, we consider the effect of the
business incubator’s altruism and compare the three cooperation mechanisms
with and without altruism. The results indicate that the mechanism of revenue
sharing leads to the highest incubator’s revenue sharing proportion. Additionally,
the incubator’s revenue sharing proportion decreases even though its
final profit increases when considering altruism. Therefore, the nonprofit incubator
can be better for cooperating with the venture capitalist than the
profit incubator. Finally, financial returns can influence their cooperation.
Description
Keywords
Business Incubator, Venture Capitalist, Revenue Sharing Mechanism, Cost Sharing Mechanism, Knowledge Sharing Mechanism
Citation
Theoretical Economics Letters, 2017, 7, 1335-1356