The early-stage venture capital (VC) industry has long been dominated by small firms comprising senior venture capitalists and few junior staff. However, during the late 1990s, a group of firms changed their internal structures, adopting pyramidal structures and redesigning internal processes to leverage the efforts of junior staff. In doing so, they followed first-movers in other professional services industries that transitioned to pyramidal models in the 20th century. Has the recent industry downturn terminated the transition, or simply delayed it? This chapter analyzes the events that led the VC firms to transition, the barriers to doing so, and related issues affecting the industry's future.
Wasserman, N. (2005), "Upside-down Venture Capitalists and the Transition Toward Pyramidal Firms: Inevitable Progression, or Failed Experiment?", Keister, L.A. (Ed.) Entrepreneurship (Research in the Sociology of Work, Vol. 15), Emerald Group Publishing Limited, Bingley, pp. 151-208. https://doi.org/10.1016/S0277-2833(05)15007-9
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