Venture capitalists find, fund, and assist high-impact entrepreneurs—individuals whose firms are ... more Venture capitalists find, fund, and assist high-impact entrepreneurs—individuals whose firms are instruments of Schumpeter’s (1939) “creative destruction” and the “creation of new economic spaces” (Acs, 2008). These entrepreneurs form firms characterized by a lack of substantial tangible assets, the expectation of several years of negative earnings, and extremely uncertain prospects. Venture capitalists provide these high-potential ventures with capital, advice, contacts, and experience. They bring to the table a host of financial and organizational “technologies” including screening capabilities, due diligence processes, staged financing, investment syndicates, compensation contracts, and corporate governance practices. Through these activities, venture capitalists help bring unproven, innovative ideas to market, overcoming the uncertainty and risk associated with new business development (Berger & Udell, 1998; Gompers & Lerner, 2001; King & Levine, 1993).
International Journal of Entrepreneurship and Small Business, 2009
This qualitative study examines the motivations for venture capitalists and entrepreneurs to act ... more This qualitative study examines the motivations for venture capitalists and entrepreneurs to act opportunistically toward one another. Structured interviews with 14 employees and five investors in a VC-funded startup revealed that venture capitalists expect opportunistic behaviour from entrepreneurs during investment rounds, but largely trust entrepreneurs between financing rounds. Both the venture capitalists and entrepreneurs reported that venture capitalists act opportunistically towards the entrepreneur and other venture partners during all stages of the startup development. These findings have important implications for entrepreneurship research, most notably, the applicability of agency theory as a theoretical perspective from which to view the complex relationship between venture capitalists and entrepreneurs.
We examine the link between CEO personality and top management team (TMT) dynamics. Our work comp... more We examine the link between CEO personality and top management team (TMT) dynamics. Our work compliments both , who initiated research into the Five Factor Model of personality and linked them to specific CEO leadership traits, and the work of Peterson, who hypothesize a linkage between CEO placement on the Five Factor model of personality and TMT dynamics. We clarify and empirically confirm the relationship between CEO Emotional Stability and TMT dynamics using improved methods and a more robust data set. We compliment and extend previous research by using measures of TMT dynamics previously demonstrated to link to firm performance: task conflict, relationship conflict, social integration, and shared cognition. We find that CEO Emotional Stability is positively correlated with TMT task conflict and social integration, but is not correlated with TMT relationship conflict or shared cognition. 510 REGIONAL FRONTIERS OF ENTREPRENEURSHIP RESEARCH 2007 510 argues that researchers can employ findings from other disciplines -personality psychology in particular -to understand the impact of the CEO on top management team performance analogous to the way that upper echelons researchers have imported and employed demography theory to understand the impact of the TMT on 511 GROWTH AND LEADERSHIP
A growing body of literature examines the formation of strategic alliances as an important value-... more A growing body of literature examines the formation of strategic alliances as an important value-added role provided by venture capital firms. This paper contributes to this literature by examining two related questions: whether venture capital firms use strategic alliances as a substitute or compliment to capital infusion, and how venture capital firms use alliances to mitigate different types of risk. Results from 2505 venture-backed startups reveal that venture capital firms treat alliance formation as a substitute for capital infusion and that the breadth of the network of syndication partners investing in the startup increases the number of its strategic alliances. We also find intentionality in alliance formation. Specifically, firms operating in industry environments characterized by technical risk are more likely to form alliances with partners capable of mitigating technical risks, and firms operating in environments characterized by market risk are more likely to form alliances with partners capable of mitigating market risk. Our findings lend additional support to the perspective that alliances represent an important mechanism through which venture capital firms add value to their portfolio companies.
RUNNING WITH THE BIG DOGS: THE INFLUENCE OF A HIGH-REPUTATION VENTURE CAPITAL INVESTOR ON THE DECISION TO INVEST IN A NEW INDUSTRY (SUMMARY
The impact of venture capital and its capacity to initiate and shape innovative activity has gene... more The impact of venture capital and its capacity to initiate and shape innovative activity has generated a substantial and thriving stream of cross-disciplinary research. Within this literature, the decision processes and investment criteria employed by venture capitalists have been the ...
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Papers by Robert Wuebker