Learning and venture capital: The growth of venture knowledge

This paper sets out to analyze the modes of ‘venture learning’, which is defined as the process whereby knowledge is acquired on how to identify, develop and exploit business opportunities and the associated ventures. The context of learning discussed here is that of high technology ventures, and the ways in which certain types of venture relevant knowledge is acquired and transferred by venture capitalists to and from the venture process. Learning is modeled as two interrelated learning modes; hypothetico-deductive and hermeneutic learning, which turn out to be closely interrelated. The resulting model focuses on what is learnt, how it is learnt and how certain external actors can influence the quality, speed and cost of learning. Conclusions are made for research, policy and managerial practice with special focus on how learning can be effectively influenced by external actors such as venture capitalists.