Abstract: Internal R&D is regarded as the main internal source of enterprise innovation, while venture capital plays a pivotal role in providing diverse resources to support start-ups in carrying out innovative activities effectively and coping with various challenges in the business process. Breakthrough innovation plays an important role in enhancing the competitive advantage of enterprises and improving the competitiveness of countries. However, there is a lack of sufficient research in the academic community on how different venture capital portfolios and participation levels will affect the innovation performance of start-ups, especially in the realm of breakthrough innovation. This paper explores the mechanism of how venture capital diversity and venture capital participation influence the relationship between R&D intensity and breakthrough innovation of start-ups, and examines the contingency impact of entrepreneurs’ previous entrepreneurial experience. An empirical analysis based on 277 questionnaires from the strategic emerging industries show that: the R&D intensity of start-ups has a significant and positive impact on firms’ breakthrough innovation. The diversification of venture capital and the degree of participation of venture capital positively moderate the relationship between R&D intensity and breakthrough innovation. Individual entrepreneurs’ failure experience negatively moderates the impact of venture capital on breakthrough innovation. Namely, those without entrepreneurial failure tend to derive more positive influences from venture capital. The conclusions help to enhance the understanding of the impact of venture capital on breakthrough innovation, provide important theoretical basis and practical reference for the investment decisions of venture capitals and corporate innovation growth.

Key words: R&D intensity, breakthrough innovation, start-ups, venture capital, entrepreneurial failure experience