The expectation of reciprocal obligations lays a foundation for the venture capitalist-entrepreneur relationship. These expectations, or perceived promises, constitute a psychological contract between the venture capitalist and the entrepreneur. In this paper, we are concerned with four forms of psychological contract violations in this relationship: i) disagreements over the strategy of the po...

Venture Capital (VC) plays an important role in the commercialisation of innovation. Sectors like information and communication technologies and biotech account for two-thirds of all VC investments. Little attention has been paid to understanding how the venture capital market extends to new industries. Based on a survey of European energy technology VCs, we discuss the factors determining the ...

This paper provides an empirical analysis of risk handling arrangements adopted in the relationship between the venture capital investor and his investee. The theoretical framework adopted is principal-agent analysis, which views the investee as a risk averse agent entering into a risk sharing contract with the investor, a risk neutral (fully diversified) principal. The sample analysed is made ...

limited access to financing from venture capitalists. Of this situation, there is widespread evidence and agreement. There is not, however, agreement as to the principal reasons why entrepreneurs in rural areas have difficulty in acquiring equity capital for new business start-ups and expansions. On the one hand, some suggest (e.g., Florida and Kenney, 1988) that few venture capital investments...

Cross-border venture capital investing has increased dramatically over the last two decades. Previous research has shown that foreign venture capitalists tend to partner with local venture capitalists as a strategy for offsetting information asymmetries and liabilities of foreignness. This paper examines the choice of co-investors by foreign venture capitalists investing in the Chinese market. ...

Access to equity capital is critical for the growth of businesses, especially for young companies, which lack the cash flows necessary to repay loans. To meet this need, a thriving venture capital industry has evolved, fostering job creation, economic growth, and innovation in the United States. Not all companies, however, have been equally able to access such investments. Firms owned by women ...

The characteristics of both entrepreneurs and venture capitalists are jointly determined by the set of real investment opportunities. An improvement in these opportunities has two effects: 1) it encourages marginal, low-quality entrepreneurs to pool with high-quality entrepreneurs, and 2) it induces the entry of venture capitalists that are less efficient at screening new investments. The marke...

This paper briefly reviews university/industry licensing and research collaborations and focuses on three university-affiliated venture capital funds, which represent the most direct participation by academic institutions in creating new ventures based on technologies invented by their faculty members. The paper provides an early perspective on these funds as mechanisms for bringing new biomedi...