The Hunter Becomes the Hunted: Non-Financial Aspects of Venture Capitalists’ Attractiveness
57 Pages Posted: 28 Jun 2017
Date Written: July 2017
Several empirical studies have investigated the selection process of venture capitalists (VCs), but the attributes of their attractiveness from entrepreneurs’ perspective remain unknown. Using conjoint analysis based on a sample of 44 German tech entrepreneurs, we investigate how information rights, control rights, support and reputation of a venture capitalist drive their attractiveness. Our analysis shows that VCs’ support and reputation are the most important attributes. Further, we explore how entrepreneurs’ experience and self-efficacy moderate these relationships. We find that inexperienced entrepreneurs as well as those having a high level of self-efficacy value venture capitalists’ reputation significantly less.
Keywords: Venture capital, resource-based view, agency theory, value add, smart capital
JEL Classification: M13, G24
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