How do bank-affiliated venture capitalists do deals? Towards a model of multiple investment logics
Qualitative Research in Financial Markets
ISSN: 1755-4179
Article publication date: 10 June 2021
Issue publication date: 27 July 2021
Abstract
Purpose
This paper aims to investigate German bank-affiliated venture capitalists’ investment practices and the emergence of their investment logics. Most studies focus on the investment behaviour of independent venture capitalists and little is known about dependent venture capitalists’ investment behaviour. The present study contributes to filling this gap in entrepreneurial finance literature.
Design/methodology/approach
The paper uses an exploratory qualitative research approach based on 27 semi-structured interviews with the top management of German bank-affiliated venture capitalists and industry experts to develop a conceptual model that explains the investment logics of bank-affiliated venture capitalists. A large amount of archival data has also been collected and used for the analysis.
Findings
The results indicate that bank-affiliated venture capitalists either follow an autonomous, contingent or hybrid investment logic. A bank-affiliated venture capitalist’s isomorphic focus – whether they feel isomorphic to the external venture capital environment or the internal parent bank’s environment – explains the emergence of multiple investment logics.
Practical implications
The paper encourages banks to get a better understanding of how the venture capital industry works and what they need to do to compete again independent venture capitalists. Banks and their affiliated venture capital units can improve their deal flows by recognising that they need to get accepted as an on-par investor in the venture capital environment.
Originality/value
The current study is the first of its kind investigating multiple investment logics by focussing on the link between different isomorphic habits and the specific context of bank-affiliated venture capitalists.
Keywords
Acknowledgements
The author particularly thanks Bruce Burton, Carlo Massironi and three anonymous reviewers for their recommendations and support. Furthermore, he is grateful for important comments by Eva Lutz during the conceptual design, the data collection as well as the writing and review process of this paper.
Citation
Granz, C. (2021), "How do bank-affiliated venture capitalists do deals? Towards a model of multiple investment logics", Qualitative Research in Financial Markets, Vol. 13 No. 4, pp. 440-481. https://doi.org/10.1108/QRFM-07-2020-0137
Publisher
:Emerald Publishing Limited
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