Over the past decade, billions of dollars have been invested by established companies in entrepreneurial ventures. There is, however, very little systematic evidence to suggest that these investments create value for the investing firm. It is possible that venture investments are guided by strategic or organizational factors rather than financial ones. It may be that investments provide an option on a novel technology, or an option to acquire the target outright. We first investigate market reactions to investing firms injecting equity into entrepreneurial target firms, then we examine factors that moderate the reactions.