Venture Capital Supply and Accounting Information System Development

Abstract

One of the most important events in the early life-cycle of any entrepreneurial firm that harbors serious growth ambitions is the Infusion of external capital (Reid, 1996). This event can lead to significant changes in the firm's ownership composition. It affects its subsequent rate of growth and, consequently, its size and organizational structure. It is within the context of such changes that the managerial demand for information about the firm is stimulated. This study examines the origins and characteristics of developments in the accounting information systems (AIS) of firms that are going through this stage. It does so by investigating the consequences of venture capital1 intervention for the entrepreneurial firm, particularly as regards the characteristics of its accounting information system.

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