IDEAS home Printed from https://ideas.repec.org/a/bpj/erjour/v12y2022i2p161-184n6.html
   My bibliography  Save this article

Research on the Relationship Between Venture Capitalists’ Trust in the Entrepreneur and Their Investment Behaviors

Author

Listed:
  • Li Sulei

    (School of Economics and Management, Harbin Engineering University, Harbin, China)

  • Yang Hongtao

    (School of Economics and Management, Harbin Engineering University, Harbin, China)

Abstract

Venture capitalists’ trust in entrepreneurs and their investment behaviors does not interact directly; Trust is a psychological state rather than static and stable phenomena. The relationship is affected by multiple factors. This study aims to develop a better understanding of the complex relationship and to show the degree of influence among factors, and to reveal “The Bewilderment of Decision-making” of VC. Based on SEM, this paper analyzes the relationship between the factors: the influencing factors at the initial stage of trust, trust, investor risk appetite, entrepreneurs’ behaviors, capitalists’ decision-making Behaviors, capitalists’ post-investment Behaviors. Our qualitative analysis is based on data by issuing 323 questionnaire surveys of 104 Chinese venture capital firms which are divided into different regions by Global Entrepreneurship Monitor (GEM). By analyzing various behaviors, we find that entrepreneurs’ behavior is a key factor in this relationship. Several factors studied earlier have a positive impact on the capitalist’s pre-investment decision-making behavior, but no significant impact on post-investment behavior. These results include trust and investor risk appetite. Through interviews, it was found that the capitalist’s post-investment behavior was related to the capitalist’s ability, resources, management mechanism and other factors.

Suggested Citation

  • Li Sulei & Yang Hongtao, 2022. "Research on the Relationship Between Venture Capitalists’ Trust in the Entrepreneur and Their Investment Behaviors," Entrepreneurship Research Journal, De Gruyter, vol. 12(2), pages 161-184, April.
    • Handle: RePEc:bpj:erjour:v:12:y:2022:i:2:p:161-184:n:6
    DOI: 10.1515/erj-2020-0151
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/erj-2020-0151
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/erj-2020-0151?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:erjour:v:12:y:2022:i:2:p:161-184:n:6. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyterbrill.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.