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The effects of social networks and contractual characteristics on the relationship between venture capitalists and entrepreneurs

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  • Kwanghui Lim

    ()

  • Brian Cu

    ()

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    Abstract

    We show how social ties and contractual factors shape the relationship between entrepreneurs and venture capitalists (VCs). While direct ties result in the VC offering more advice to the entrepreneur, indirect ties result in greater levels of disagreement between VC and entrepreneur. We also find that contractual favorableness is associated with more advice and less disagreement, but that contractual flexibility is surprisingly not significant. The results vary by area of advice and disagreement. Our results suggest that scholars and practitioners must integrate contractual and social network perspectives to better understand the VC-entrepreneur relationship. Copyright Springer Science+Business Media, LLC 2012

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    File URL: http://hdl.handle.net/10.1007/s10490-010-9212-x
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    Bibliographic Info

    Article provided by Springer in its journal Asia Pacific Journal of Management.

    Volume (Year): 29 (2012)
    Issue (Month): 3 (September)
    Pages: 573-596

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    Handle: RePEc:kap:asiapa:v:29:y:2012:i:3:p:573-596

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    Postal: P.O. Box 17, 3300 AA Dordrecht, the Netherlands
    Web page: http://www.springerlink.com/link.asp?id=106589

    Related research

    Keywords: Entrepreneurship; Venture capital; Disagreement and advice; Social networks;

    References

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    Cited by:
    1. Peng, Mike W. & Lee, Seung-Hyun & Hong, Sungjin J., 2014. "Entrepreneurs as intermediaries," Journal of World Business, Elsevier, vol. 49(1), pages 21-31.

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