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Uk Venture Capital Funds And The Funding Of New Technology‐Based Businesses: Process And Relationships

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  • R. C. Sweeting

Abstract

Through the 1980s the UK venture capital industry, with its perceived focus on risky and innovative businesses, has experienced substantial growth in terms of the number of funds, amounts invested and number of individual investments. In this article, the Tyebjee and Bruno (1984) venture capital deal creation model which was originated in the US has been used to explore the process of venture capital provision and the development of relationships between venture capital funds and operating business managements. An empirical study of how UK‐based venture capital funds operate has been undertaken. The findings generally corroborated the model in a UK context. It was also observed that while venture capitalists actively worked to nurture good relationships with operating business managements they were prepared to act decisively and proactively to protect their investments when they saw them being threatened fundamentally. There vas also some evidence which suggested a slackening of interest in innovative, technology‐based businesses, particularly those in their early stages of development. Further work is needed to identify if there are conceptual problems with the provision of venture capital to these types of businesses or implementation problems which are tractable.

Suggested Citation

  • R. C. Sweeting, 1991. "Uk Venture Capital Funds And The Funding Of New Technology‐Based Businesses: Process And Relationships," Journal of Management Studies, Wiley Blackwell, vol. 28(6), pages 601-622, November.
    • Handle: RePEc:bla:jomstd:v:28:y:1991:i:6:p:601-622
    DOI: 10.1111/j.1467-6486.1991.tb00982.x
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    Cited by:

    1. Dirk De Clercq & Harry J. Sapienza, 2005. "When Do Venture Capital Firms Learn from Their Portfolio Companies?," Entrepreneurship Theory and Practice, , vol. 29(4), pages 517-535, July.
    2. Caroline Tarillon & Han Yu & Ludivine Adla & Elodie Manthé & Geoffroy Enjolras, 2023. "Similarity is not everything: the influence of personal characteristics of entrepreneurs and investors on their fit," International Entrepreneurship and Management Journal, Springer, vol. 19(2), pages 709-732, June.
    3. Judit Karsai & Mike Wright & Igor Filatotchev, 1997. "Venture Capital in Transition Economies: The Case of Hungary," Entrepreneurship Theory and Practice, , vol. 21(4), pages 93-110, July.
    4. Smith, Julia A. & Cordina, Renzo, 2014. "The role of accounting in high-technology investments," The British Accounting Review, Elsevier, vol. 46(3), pages 309-322.
    5. Kourosh Shafi, 2021. "Investors’ evaluation criteria in equity crowdfunding," Small Business Economics, Springer, vol. 56(1), pages 3-37, January.

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