The post‐investment relationship between a venture capitalist and its investee companies
International Journal of Entrepreneurial Behavior & Research
ISSN: 1355-2554
Article publication date: 10 August 2012
Abstract
Purpose
The purpose of this paper is to identify the key characteristics of the post‐investment relationship between the venture capital firm and its investee companies.
Design/methodology/approach
The research is a case study of a major UK venture capital firm using qualitative research to determine the key characteristics of the post‐investment relationship. The study is based on interviews with parties on both sides of the relationship.
Findings
While the results reflect the findings of the entrepreneurship and venture capital literature they also point to the importance of network growth and development for organizational learning in the venture capital industry, professionalization of investee firms and as a context in which the selection of the entrepreneur and the post investment relationship are set.
Research limitations/implications
The research has the limitation of most case studies that the results cannot readily be generalized, in this case to the wider population of venture capital firms. Confidentiality issues also limited the extent to which a longitudinal study could be conducted.
Practical implications
A better understanding of the post‐investment relationship can inform entrepreneurs in their pitch for funds and in their anticipation of the post investment relationship. This understanding can also assist venture capital firms in the management of this relationship.
Originality/value
The case study uses data from rare access to a venture capital firm. It also differs by interviewing both parties to the post‐investment relationship, that is venture capitalist and investee firm.
Keywords
Citation
Leece, D., Berry, T., Miao, J. and Sweeting, R. (2012), "The post‐investment relationship between a venture capitalist and its investee companies", International Journal of Entrepreneurial Behavior & Research, Vol. 18 No. 5, pp. 587-602. https://doi.org/10.1108/13552551211253946
Publisher
:Emerald Group Publishing Limited
Copyright © 2012, Emerald Group Publishing Limited