Governance in Deeptech Ventures: The Critical Role and Impact of Venture Boards for Deeptech Founders and their Firms

In a world experiencing paradigm-shifting challenges on economic, societal, environmental and geopolitical levels, the power of new ventures transforming our world is rising (Kolev et al., 2022; Kortum & Lerner, 2000). Increasingly, new ventures are crucial in providing technological solutions to address global issues, such as climate change, poverty and human health (de Apodaca et al., 2022; Kolev et al., 2022). Despite the critical importance of entrepreneurship, high failure rates among new ventures persist and recent scandals underscore the complexities involved in venture governance (Ladd, 2023; Forbes, 2016).

As the primary governance mechanism, venture boards are central to the success of new ventures (Yao & O’Neill, 2022; Garg, 2020). Board directors support entrepreneurs with advice and resources while overseeing management actions and venture development (Hillman & Dalziel, 2003). However, while controversy among entrepreneurs and investors has emerged regarding the actual value venture boards provide to firms, academic evidence remains limited and often contradictory (Li et al., 2020). That is problematic for both practitioners and scholars since it places a key aspect of entrepreneurship — venture governance — amidst practical intricacies and theoretical inconsistencies. Consequently, our understanding concerning the implications of composition and decision-making processes in new ventures remains nebulous. In this Ph.D. project, I aim to address this existing research gap by focusing on venture boards in deeptech ventures that are commercializing breakthroughs in science and engineering (de Apodaca et al., 2022). These ventures face distinct techno-economic challenges regarding firm, product and team characteristics, highlighting the importance yet complexities for effective venture boards and the collaboration between deeptech founders and their investors.

This Ph.D. dissertation comprises three core articles. Article I provides a review of venture board literature, exposing research gaps and inconsistencies and putting forth a future research agenda. Article II illuminates the interactions between deeptech teams and their boards, positing an emergent process framework that uncovers distinct board processes crucial to overcoming techno-economic knowledge disparities and achieving symbiotic board oversight and insight.
Article III utilizes a quantitative dataset of U.S. VC-backed deeptech ventures and investigates the configurations of human capital endowments of entrepreneurs and directors to achieve optimized fundraising performance. The study provides evidence for the divergent impact of human capital throughout governance structures and underscores the relevance of technical expertise on boards in deeptech ventures.

Overall, I address the urgent need to advance scholarly knowledge of governance in deeptech ventures. By taking a holistic approach utilizing conceptual, qualitative and quantitative methods, I expand the empirical understanding of the roles and impact of venture boards on the development of deeptech ventures. Transitioning traditional governance theories into entrepreneurial research, I establish deeptech ventures as a distinct governance setting and propose novel theoretical concepts, complementing recent advancements in venture governance theorizing (Garg, 2020). Finally, I offer a strategic framework to guide entrepreneurs and investors in composing and managing efficient venture boards and propose strategies for policymakers to foster deeptech entrepreneurship and its governance.