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Investor Type, Cognitive Governance and Performance in Young Entrepreneurial Ventures: A Conceptual Framework

Author

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  • Christophe Bonnet

    (GDF - Gestion, Droit et Finance - EESC-GEM Grenoble Ecole de Management)

  • Peter Wirtz

    (Laboratoire de Recherche Magellan - UJML - Université Jean Moulin - Lyon 3 - Université de Lyon - Institut d'Administration des Entreprises (IAE) - Lyon)

Abstract

This article contributes to a better understanding of the process of entrepreneurial finance from a behavioral perspective. We specifically examine the cognitive features and interaction of three key-actors in entrepreneurial finance: entrepreneurs, business angels and venture capitalists and derive implications for performance (value creation and growth) when a young venture raises external equity capital. Concepts of cognitive cost and value enhance theoretical insight into why BA and VC intervention is typically sequential. We also predict in what specific situations one should expect simultaneous coinvestment by BAs and VCs and how investors can use cognitive levers to influence the speed of growth.

Suggested Citation

  • Christophe Bonnet & Peter Wirtz, 2011. "Investor Type, Cognitive Governance and Performance in Young Entrepreneurial Ventures: A Conceptual Framework," Post-Print halshs-00642737, HAL.
    • Handle: RePEc:hal:journl:halshs-00642737
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00642737
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    Cited by:

    1. Cumming, Douglas & Groh, Alexander Peter, 2018. "Entrepreneurial finance: Unifying themes and future directions," Journal of Corporate Finance, Elsevier, vol. 50(C), pages 538-555.
    2. Jonathan Labbé, 2017. "Private Equity: Universality of financing and universality of effects on business innovation? A conceptual approach [Capital-investissement : Universalité du financement et universalité des effets ," Post-Print hal-03000109, HAL.
    3. Christophe Bonnet & Laurence Cohen & Peter Wirtz, 2015. "Angel Cognition and Active Involvement in BAN Governance and Management," Working paper serie RMT - Grenoble Ecole de Management hal-01182804, HAL.
    4. Linda Bergset, 2015. "The Rationality and Irrationality of Financing Green Start-Ups," Administrative Sciences, MDPI, vol. 5(4), pages 1-26, November.
    5. Bonnet, Christophe & Capizzi, Vincenzo & Cohen, Laurence & Petit, Aurelien & Wirtz, Peter, 2022. "What drives the active involvement in business angel groups? The role of angels' decision-making style, investment-specific human capital and motivations," Journal of Corporate Finance, Elsevier, vol. 77(C).
    6. Chen, Zhuming & Luo, Xue, 2024. "Optimal investment and exit decision of venture capitals with multiple heterogeneous Beliefs," International Review of Economics & Finance, Elsevier, vol. 93(PA), pages 1138-1153.
    7. Christoph Maus & Andrea Greven & Niklas Kurth & Malte Brettel, 2024. "How do investor characteristics of business angels and venture capitalists predict the occurrence of co-investments?," Journal of Business Economics, Springer, vol. 94(5), pages 763-811, July.
    8. Laurence Cohen & Peter Wirtz, 2022. "Decision-making style in entrepreneurial finance and growth," Small Business Economics, Springer, vol. 59(1), pages 183-210, June.
    9. Johannes Wallmeroth & Peter Wirtz & Alexander Peter Groh, 2017. "Institutional Seed Financing, Angel Financing, and Crowdfunding of Entrepreneurial Ventures: A Literature Review," Working Papers hal-01527999, HAL.
    10. Kamran Ahmed Siddiqui & Mohammad Emad Al-Shaikh & Ishtiaq Ahmed Bajwa & Omar Alenzi, 2021. "Venture capital challenges in Saudi Arabia," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 8(3), pages 291-302, March.
    11. Laurence Cohen & Kirsten Burkhardt, 2019. "Entrepreneurs (novices vs. experts) and investors: Interaction and rationality dynamics (effectual vs. causal) [Entrepreneurs (novice vs. expert) et investisseurs : interactions et dynamique des ra," Post-Print hal-02177388, HAL.
    12. Thomas B. Long & Vincent Blok, 2021. "Niche level investment challenges for European Green Deal financing in Europe: lessons from and for the agri-food climate transition," Palgrave Communications, Palgrave Macmillan, vol. 8(1), pages 1-9, December.

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    More about this item

    Keywords

    Business Angel; Venture Capitalist; Cognitive Governance; Venture Growth;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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