The Venture Capitalist: A Relationship Investor

A synopsis of this study appears in Porter M.E. , “Capital Disadvantage: America's Failing Capital Investment System,” Harvard Business Review (September/October 1992), pp. 65–82.

Thurow L. , Head to Head (New York NY: William Morrow and Company, 1992).

Elango B. Fried V.H. Hisrich R.D. Polonchek A. , “How Venture Capital Firms Differ”, Journal of Business Venturing (Autumn 1994).

Rosentein J. Bruno A.V. Bygrave W.D. Taylor N.T. , “The CEO, Venture Capitalists, and the Board,” Journal of Business Venturing, 8 (1993): 99–113.

Gorman M. Sahlman W.A. , “What Do Venture Capitalists Do?” Journal of Business Venturing, 4 (1990): 231–248.

Ibid.

Bygrave W.D. , “Syndicated Investments by Venture Capital Firms: A Networking Perspective,” Journal of Business Venturing, 2 (1987): 139–154.

Sapienza H.J. Timmons J.A. , “Launching and Building Entrepreneurial Companies: Do Venture Capitalists Add Value?” in Brockhaus R. , eds., Frontiers of Entrepreneurship Research 1989, (Wellesley, MA: Babson College, 1989), pp. 245–257.

Rosenstein J. , “The Board and Strategy: Venture Capital and High Technology,” Journal of Business Venturing, 3 (1988): 159–170.

Rosenstein J. Bruno A.V. Bygrave W.D. Taylor N. , “Do Venture Capitalists on Boards of Portfolio Companies Add Value Besides Money?” in Brockhaus R. , op. cit., pp. 216–229.

Sapienza H.J. , “When Do Venture Capitalists Add Value?” Journal of Business Venturing, 7 (1992): 9–27.

This is frequently not the case in either late-stage or seed-stage investments. If the VCs take too much equity at seed stage, the manager's equity interest may become too diluted if subsequent financing rounds are needed.

Fried V.H. Hisrich R.D. , “Toward a Model of Venture Capital Investment Decision Making,” Financial Management (forthcoming).

Prahalad C.K. Bettis R.A. , “The Dominant Logic: A New Linkage between Diversity and Performance,” Strategic Management Journal, 7 (1986): 485–501.

The wisdom of a small firm having a tight strategic focus is strongly supported by Roberts E. , Entrepreneurs in High Technology (New York, NY: Oxford University Press, 1991).

Gomez-Mejia L.R. Balkin D.B. Welbourne T.M. , “Influence of Venture Capitalists on High Technology Management,” Journal of High Technology Management, 1 (1990): 103–118.

Eisenhardt K.M. , “Building Theories from Case Study Research,” Academy of Management Review, 14 (1989): 532–550.