Does VC backing affect brand strategy in technology ventures?

Research Summary: The resource-based view of the firm characterizes brands as important resources for firm growth and competitive advantage. Existing studies offer theory and evidence that venture capital (VC) backing enhances the growth of new technology ventures along different dimensions. It is not clear, however, whether and how VC backing affects the development of brand assets. In a study of VC-backed and non-VC-backed nanotechnology ventures in the United Kingdom, we find a positive association between VC backing and the development of brand assets. We also find that VC-backed technology ventures tend to create brand assets with a wider scope, which can be deployed across multiple different product-markets. Managerial Summary: Brand strategy is critical for the success of entrepreneurial firms and can be challenging for firms operating in nascent industries that aim to commercialize innovations stemming from general purpose technologies. Such firms face dilemmas on whether to diversify or not into different product-markets, how many brand assets to develop, and whether to leverage a brand asset across multiple product categories. In a study of nanotechnology ventures, we find that VC-backing can affect the development of brand strategy: VC-backed ventures tend to develop more brand assets compared with non-VC-backed ventures and tend to create brand assets with a wider scope, which can be deployed across multiple different product-markets.