The Impact of Venture Capital on Family Businesses: Evidence from Spain

Martí, J., Menéndez-Requejo, S., Rottke, O.M. (2013). The Impact of Venture Capital on Family Businesses: Evidence from Spain. Journal of World Business, 48, 420-430.

50 Pages Posted: 25 Dec 2011 Last revised: 15 Dec 2017

See all articles by José Martí

José Martí

Universidad Complutense de Madrid - Department of Accounting and Finance

Susana Menéndez-Requejo

Universidad de Oviedo - Facultad de Economicas

Olaf Matthaeus Rottke

Complutense University of Madrid - Departamento de Economia Financiera; Zeppelin University - Chair for Strategic Organization and Financing

Date Written: December 21, 2010

Abstract

We analyze growth in family and non-family Spanish venture capital-backed firms. When the venture capital firm (VC) does not hold a majority stake, the usual risk aversion attitudes in family firms may lead to conflicts between the management cultures of the existing and new shareholders, which may affect growth. We find lower firm growth after the initial round in family firms only when the investor holds a minority stake. Our results may explain the under-representation of family firms in VC portfolios and highlight the need to align the objectives of family managers and VC investors before the initial VC round.

Keywords: Venture capital, family business, management culture, succession, growth, socioemotional wealth

JEL Classification: G24, G32

Suggested Citation

Martí Pellón, José and Menéndez-Requejo, Susana and Rottke, Olaf Matthaeus, The Impact of Venture Capital on Family Businesses: Evidence from Spain (December 21, 2010). Martí, J., Menéndez-Requejo, S., Rottke, O.M. (2013). The Impact of Venture Capital on Family Businesses: Evidence from Spain. Journal of World Business, 48, 420-430., Available at SSRN: https://ssrn.com/abstract=1976811 or http://dx.doi.org/10.2139/ssrn.1976811

José Martí Pellón (Contact Author)

Universidad Complutense de Madrid - Department of Accounting and Finance ( email )

Carretera de Humera s/n
Madrid 28223, Madrid 28223
Spain
+ 3491 3942310 (Phone)
+ 34 91 3942534 (Fax)

Susana Menéndez-Requejo

Universidad de Oviedo - Facultad de Economicas ( email )

Campus del Cristo
Oviedo, Asturias 33071
Spain
+34 985 10 39 12 (Phone)

Olaf Matthaeus Rottke

Complutense University of Madrid - Departamento de Economia Financiera ( email )

Carretera de Humera s/n
Madrid, Madrid 28223
Spain

Zeppelin University - Chair for Strategic Organization and Financing ( email )

Am Seemooser Horn 20
Friedrichshafen, Lake Constance 88045
Germany

HOME PAGE: http://www.zeppelin-university.de

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