To read this content please select one of the options below:

Start-up funding negotiations with venture capitalists: understanding the behaviors and strategies of experienced entrepreneurs

Christian Glade (Chair of Strategic Entrepreneurship, HHL Leipzig Graduate School of Management, Leipzig, Germany)
Peter Kesting (Department of Management, Aarhus University, Aarhus, Denmark)
Remigiusz Smolinski (Center for International Negotiation, HHL Leipzig Graduate School of Management, Leipzig, Germany)
Dominik K. Kanbach (Chair of Strategic Entrepreneurship, HHL Leipzig Graduate School of Management, Leipzig, Germany)

International Journal of Entrepreneurial Behavior & Research

ISSN: 1355-2554

Article publication date: 13 January 2025

84

Abstract

Purpose

This study explores the negotiation behaviors and strategies employed by experienced entrepreneurs to secure venture capital (VC) funding.

Design/methodology/approach

Using a qualitative approach, we conducted interviews with 32 accomplished founders with track records in securing VC funding. Our conceptual underpinning rests upon an existing negotiation competency model. This study employed a systematic and iterative data analysis method, following an inductive approach grounded in Gioia et al.’s (2013) methodology to conceptualize the unprocessed interview data.

Findings

We identified three dimensions characterizing entrepreneurial negotiation behavior in VC negotiations: negotiation competencies, power tactics, and negotiation style. Furthermore, we identified specific behaviors in these dimensions and explored how entrepreneurs apply these skills in the VC context.

Research limitations/implications

This study contributes a nuanced understanding of entrepreneurs’ negotiation behaviors, opening avenues for further research on effective strategies in entrepreneurial finance.

Practical implications

Entrepreneurs can leverage the identified negotiation strategies to enhance their skills and navigate VC negotiations more effectively, potentially leading to better funding outcomes. Furthermore, training programs can be crafted to encourage the cultivation of these behaviors.

Originality/value

This study is the first to systematically examine the negotiation behaviors and strategies employed by experienced entrepreneurs in VC negotiations, revealing entrepreneurs’ specific behaviors and elucidating how these behaviors are employed within negotiations to provide practical insights.

Keywords

Citation

Glade, C., Kesting, P., Smolinski, R. and Kanbach, D.K. (2025), "Start-up funding negotiations with venture capitalists: understanding the behaviors and strategies of experienced entrepreneurs", International Journal of Entrepreneurial Behavior & Research, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/IJEBR-06-2024-0615

Publisher

:

Emerald Publishing Limited

Copyright © 2024, Emerald Publishing Limited

Related articles