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Article
Publication date: 5 January 2021

Ronit Yitshaki, Eli Gimmon and Susanna Khavul

This study aims to examine the extent to which board size, the use of power by venture capital investors and entrepreneurs’ interpersonal tactics such as persuasion to sway board…

Abstract

Purpose

This study aims to examine the extent to which board size, the use of power by venture capital investors and entrepreneurs’ interpersonal tactics such as persuasion to sway board decisions, influence the long-term survival of start-ups.

Design/methodology/approach

This study used a mixed-methods approach. The quantitative part is based on data collected from 179 chief executive officers (CEOs) of high-tech start-ups community financed by venture capitalists (VCs) in Israel of which 59 did not survive. To achieve a better understanding of these findings, semi-structured interviews with 12 entrepreneurs were conducted.

Findings

Smaller boards were positively associated with venture survival. The use of power by VC investors positively influenced start-up survival. CEO persuasion had a negative effect on venture survival; however, its interaction with board size suggests that it had a lesser effect on very small boards.

Practical implications

Although investors’ control over decision-making contributes to long-term survival, entrepreneurs should be aware of the possible detrimental effects of exercising a high level of persuasion in board processes. The findings also suggest that a small board size is preferable for start-up survival.

Originality/value

Exploring the effect of board processes on venture survival is considered complex. A unique sample of high-technology start-ups consisting of both surviving and failed start-ups was analyzed to explore the effects of persuasion and power in board processes.

Details

Journal of Enterprising Communities: People and Places in the Global Economy, vol. 15 no. 4
Type: Research Article
ISSN: 1750-6204

Keywords

Article
Publication date: 29 April 2021

Ronit Yitshaki

The purpose of this study is to examine the role of emotional intelligence (EI) in explaining high-tech entrepreneurs' psychological ownership (PO) and, in turn, how their PO…

Abstract

Purpose

The purpose of this study is to examine the role of emotional intelligence (EI) in explaining high-tech entrepreneurs' psychological ownership (PO) and, in turn, how their PO influences venture growth.

Design/methodology/approach

This study is based on data collected from 106 high-tech Israeli entrepreneurs.

Findings

The findings indicate that using emotions for problem-solving is positively associated with PO sense of efficacy, and that appraisal of emotions of others is negatively associated with PO sense of territoriality. Moreover, PO sense of efficacy is positively associated with growth, whereas sense of territoriality is negatively associated with growth. Finally, sense of territoriality has a curvilinear effect on venture growth.

Research limitations/implications

Understanding of the antecedents of entrepreneurs' PO and its influence on firms' growth is scant. The findings contribute to the psychology of entrepreneurship and PO literature by showing the influence of affective-based processes on high-tech start-up growth.

Practical implications

The findings of this study suggest the entrepreneurs' EI indirectly affects other affective behaviors such as PO, which in turn influence venture growth. It highlights the need of entrepreneur to regulate their emotions and manage the emotional- and cognitive-based processes for the sake of firms' growth.

Originality/value

The findings expand the knowledge pertaining to the psychology of entrepreneurship by showing how EI as an affective dimension is interrelated with affective-based process and entrepreneurial firms' growth.

Details

Journal of Small Business and Enterprise Development, vol. 28 no. 4
Type: Research Article
ISSN: 1462-6004

Keywords

Article
Publication date: 4 July 2008

Ronit Yitshaki

The aim of this paper is to examine the inherent and actual conflicts between venture capitalists (VCs) and entrepreneurs, as well as the possible resolutions of these conflicts.

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Abstract

Purpose

The aim of this paper is to examine the inherent and actual conflicts between venture capitalists (VCs) and entrepreneurs, as well as the possible resolutions of these conflicts.

Design/methodology/approach

This paper is based on 42 semi‐structured interviews conducted with Israeli VCs and entrepreneurs (14 VCs and 28 entrepreneurs). In addition, quantitative data were collected about VCs' scope of involvement and their perceived portfolio performance.

Findings

It was found that conflict is inherent in VCs and entrepreneurs' relations as both parties have different conceptions of the venture and the contractual arrangements. Actual conflicts were found to be associated with VCs' level of involvement and perceived performance. The findings indicate that VCs' strategic involvement is associated with cognitive conflicts and collaboration, whereas VCs' managerial involvement is associated with managerial replacement and affective conflicts. The findings provide an insight into the dynamic nature of conflicts between VCs and entrepreneurs, suggesting that affective conflicts may sometimes evolve into cognitive mode, as managerial replacement enables both parties to restructure their relations.

Research limitation/implications

The findings call for further examination of interorganizational conflicts involving asymmetry of power and resource dependence. In addition, the findings also call for deeper examination of how coordination mechanisms of interorganizational relations come to be a source of conflict and how such conflicts may vary in different contexts.

Practical implications

The findings of this paper suggest that both VCs and entrepreneurs should establish conflict management mechanisms, such as similar conceptions and a shared vision, to ensure better cooperation.

Originality/value

This paper provides an in‐depth insight into the embeddedness of conflicts in VCs and entrepreneurs' relations. The finding of this study contribute to theory building of VCs and entrepreneurs' conflicts suggesting that VCs' cooperation depends on both parties' ability to resolve inherent and actual conflicts.

Details

International Journal of Conflict Management, vol. 19 no. 3
Type: Research Article
ISSN: 1044-4068

Keywords

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