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Effects of Innovativeness and Venture Stage on Venture Capitalist-Entrepreneur Relations

Author

Listed:
  • Harry J. Sapienza

    (College of Business Administration, The University of South Carolina, Columbia, South Carolina 29208)

  • Allen C. Amason

    (College of Business and Industry, Mississippi State University, Mississippi State, Mississippi 39762)

Abstract

Innovative new ventures constitute a disproportionately large source of economic growth, and the amount of venture capital flowing into such ventures is increasing. A key component in the success of venture-capital-backed firms is the relationship between the lead venture capitalist (VC) and the venture's founding entrepreneur (E). We examined the impact of innovativeness and venture stage on VC-E relations in 51 venture-capital-backed firms and found: (1) greater marketing innovativeness in ventures associated with greater openness in VC-E pairs, (2) greater technological innovativeness in ventures associated with greater conflict in VC-E pairs, and (3) more frequent VC-E interaction in earlier stage ventures. We found that the relationship between technological innovativeness and openness of VC-E relations depended upon the venture's stage.

Suggested Citation

  • Harry J. Sapienza & Allen C. Amason, 1993. "Effects of Innovativeness and Venture Stage on Venture Capitalist-Entrepreneur Relations," Interfaces, INFORMS, vol. 23(6), pages 38-51, December.
    • Handle: RePEc:inm:orinte:v:23:y:1993:i:6:p:38-51
    DOI: 10.1287/inte.23.6.38
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    Citations

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    Cited by:

    1. Antoaneta P. Petkova & Violina P. Rindova & Anil K. Gupta, 2013. "No News Is Bad News: Sensegiving Activities, Media Attention, and Venture Capital Funding of New Technology Organizations," Organization Science, INFORMS, vol. 24(3), pages 865-888, June.
    2. Christophe Bonnet, 2003. "Confiance et gouvernement des entreprises: le rôle de la confiance dans la relation capital-investisseurs et dirigeants et son influence sur la performance," Grenoble Ecole de Management (Post-Print) hal-00451522, HAL.
    3. Lowell W. Busenitz & Douglas D. Moesel & James O. Fiet & Jay B. Barney, 1997. "The Framing of Perceptions of Fairness in the Relationship between Venture Capitalists and New Venture Teams," Entrepreneurship Theory and Practice, , vol. 21(3), pages 5-22, April.
    4. Michael Schefczyk, 2001. "Determinants of Success of German Venture Capital Investments," Interfaces, INFORMS, vol. 31(5), pages 43-61, October.
    5. Christophe Bonnet, 2003. "Confiance et gouvernement des entreprises: le rôle de la confiance dans la relation capital-investisseurs et dirigeants et son influence sur la performance," Post-Print hal-00451522, HAL.
    6. Veroniek Collewaert & Harry J. Sapienza, 2016. "How Does Angel Investor–Entrepreneur Conflict Affect Venture Innovation? It Depends," Entrepreneurship Theory and Practice, , vol. 40(3), pages 573-597, May.
    7. Barney, Jay B. & Busenitz, Lowell W. & Fiet, James O. & Moesel, Douglas D., 1996. "New venture teams' assessment of learning assistance from venture capital firms," Journal of Business Venturing, Elsevier, vol. 11(4), pages 257-272, July.
    8. Michael Schefczyk, 1999. "Erfolgsdeterminanten von Venture Capital-Investments in Deutschland," Schmalenbach Journal of Business Research, Springer, vol. 51(12), pages 1123-1145, December.
    9. Yannis Pierrakis & George Saridakis, 2019. "The role of venture capitalists in the regional innovation ecosystem: a comparison of networking patterns between private and publicly backed venture capital funds," The Journal of Technology Transfer, Springer, vol. 44(3), pages 850-873, June.
    10. Barinova, Vera & Eremkin, Vladimir & Lanshina, Tatiana, 2015. "Overcoming the Discrete Nature of Innovation Financing in the Early Stages of Russia," Published Papers 431504, Russian Presidential Academy of National Economy and Public Administration.

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