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When do Venture Capitalists Make a Difference? The Export Intensity of Venture Capital Backed Companies

International Entrepreneurship

ISBN: 978-0-76231-227-6, eISBN: 978-1-84950-356-3

Publication date: 23 September 2005

Abstract

There has been considerable debate concerning the contribution of venture capitalists (VCs) to their investee companies (Sapienza, Manigart, & Vermeir, 1996). This research has shown that VCs can add value and impact the strategic direction of their investee firms through their skills and knowledge. These skills lie in two distinct areas: financial (monitoring) and non-financial (strategic and operational involvement) skills (Pruthi, Wright, & Lockett, 2003). The monitoring and involvement of VC firms in their investees have been shown to vary according to their needs (Lerner, 1995). On balance, the evidence suggests greater involvement during the more uncertain earlier stages than during the later stages when the firm is more established (Sapienza, Amason, & Manigart, 1994; Elango, Fried, Hisrich, & Polonchek, 1995). This suggests that the VC's ability to bring about change will be mediated by the impact of the history of the firm via path dependency (Teece, Pisano, & Shuen, 1997).

Citation

Lockett, A., Wright, M., Burrows, A., Scholes, L. and Paton, D. (2005), "When do Venture Capitalists Make a Difference? The Export Intensity of Venture Capital Backed Companies", Shepherd, D.A. and Katz, J.A. (Ed.) International Entrepreneurship (Advances in Entrepreneurship, Firm Emergence and Growth, Vol. 8), Emerald Group Publishing Limited, Leeds, pp. 249-271. https://doi.org/10.1016/S1074-7540(05)08009-8

Publisher

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Emerald Group Publishing Limited

Copyright © 2005, Emerald Group Publishing Limited