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The interplay of track record and trustworthiness in venture capital fundraising

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  • Kuckertz, Andreas
  • Kollmann, Tobias
  • Röhm, Patrick
  • Middelberg, Nils

Abstract

Venture capital (VC) firms raising funds from their limited partners (LPs) have to provide arguments extending beyond the firm's track record to convince those partners to commit to their fund. We suggest that the subdimensions of perceived trustworthiness, that is, perceived ability, integrity, and benevolence, play a vital role in the relationship between VCs and their potential LPs. Our analysis of a worldwide sample of 148 LPs sheds light on LP decision making. In particular, VC firms with medium to high levels of track records seem to benefit from managing trustworthiness. Hence, a VC firm's trustworthiness is not a substitute for a track record but instead something that complements one.

Suggested Citation

  • Kuckertz, Andreas & Kollmann, Tobias & Röhm, Patrick & Middelberg, Nils, 2015. "The interplay of track record and trustworthiness in venture capital fundraising," Journal of Business Venturing Insights, Elsevier, vol. 4(C), pages 6-13.
    • Handle: RePEc:eee:jobuve:v:4:y:2015:i:c:p:6-13
    DOI: 10.1016/j.jbvi.2015.06.001
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    References listed on IDEAS

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    1. Robert Loos & Bernhard Schwetzler, 2017. "Fueling the buyout machine: fundraising in private equity," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 31(4), pages 397-443, November.
    2. Manuel Kaiser & Andreas Kuckertz, 2025. "Emotions and entrepreneurial finance: Analysis of venture capitalists’ and business angels’ digital footprints on Twitter," International Entrepreneurship and Management Journal, Springer, vol. 21(1), pages 1-29, December.
    3. De Silva, Cristina & Del Gaudio, Belinda Laura & Gervasoni, Anna & Lertora, Michele, 2025. "Private equity and financial distress: A bibliometric literature review," Research in International Business and Finance, Elsevier, vol. 74(C).
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    5. Patrick Röhm & Andreas Köhn & Andreas Kuckertz & Hermann S. Dehnen, 2018. "A world of difference? The impact of corporate venture capitalists’ investment motivation on startup valuation," Journal of Business Economics, Springer, vol. 88(3), pages 531-557, May.

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