150 Venture Capital Networks: Present and Future
84 Pages Posted: 28 Oct 2023 Last revised: 10 Oct 2024
Date Written: November 13, 2023
Abstract
Although there is wide recognition of the importance of venture capital networks in shaping entrepreneurial outcomes and innovation ecosystems, the complex dynamics of these networks are not yet fully understood. To date, entrepreneurship and finance researchers have tended to focus on dyadic funding relationships within venture capital networks, overlooking the multifaceted and evolving nature of these ecosystems. To address this, we conduct a systematic review of 150 articles published in 61 journals across the Management, Entrepreneurship, Finance, and Network Science disciplines that makes three contributions. First, it proposes a comprehensive definition of venture capital networks and identifies a framework of network roles throughout the investment cycle, from deal sourcing to exit strategies. Second, it demonstrates that the key to understanding how venture capital networks influence entrepreneurial success and innovation is to jointly account for both their structural properties and dynamic evolution. By linking network structures and temporal dynamics, the findings also suggest a theoretical contribution based on the relationship between network topology and the propagation of information, resources, and shocks within the ecosystem. Third, the review underscores that venture capital networks are not just static structures but dynamic systems that adapt and evolve in response to market conditions, technological advancements, and regulatory changes. Our cross-disciplinary review highlights methodological frontiers in network science, including multilayer analyses, high-order interactions, and generative models, that hold promise for advancing our understanding of venture capital networks. We provide researchers with an evidence-based research agenda to guide future inquiry on this vital topic, emphasizing the potential for interdisciplinary collaboration to unlock new insights into the complex dynamics of entrepreneurial finance.
Keywords: Venture Capital, Financial Networks, Venture Capital Networks, Entrepreneurial Finance
JEL Classification: G24, M14, D85, L14
Suggested Citation: Suggested Citation