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The entrepreneur's perception in the entrepreneur--VCF relationship: the impact of conflict types on investor value

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  • Malte Brettel
  • René Mauer
  • Daniel Appelhoff

Abstract

The role of conflict has been the subject of extensive research in the area of psychology and sociology and -- more recently -- in the context of the entrepreneur--investor relationship. This study examines the effect of perceived task conflict and relationship conflict on the perceived value that an entrepreneur ascribes to her venture capital firm (VCF). We analyzed survey data of 152 German ventures and find relationship conflict to be detrimental for perceived investor value, whereas task conflict significantly increases an entrepreneur's perception of investor value. This effect is even stronger in the absence of relationship conflict. In addition, we tested a set of interaction effects on this relationship. We build on Sapienza's (1992) seminal work, who studied a predecessor of task conflict -- divergence of perspective -- and extend research by linking the most important conflict types to investor value in the context of young ventures. We contribute to the literature on conflict between entrepreneurs and VCFs and reveal clear patterns regarding the effects and interactions of task conflict and relationship conflict.

Suggested Citation

  • Malte Brettel & René Mauer & Daniel Appelhoff, 2013. "The entrepreneur's perception in the entrepreneur--VCF relationship: the impact of conflict types on investor value," Venture Capital, Taylor & Francis Journals, vol. 15(3), pages 173-197, July.
    • Handle: RePEc:taf:veecee:v:15:y:2013:i:3:p:173-197
    DOI: 10.1080/13691066.2013.782625
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    References listed on IDEAS

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    1. Bengtsson, Ola & Hsu, David H., 2015. "Ethnic matching in the U.S. venture capital market," Journal of Business Venturing, Elsevier, vol. 30(2), pages 338-354.
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    Cited by:

    1. Alqatawni, Tahsen, 2013. "The Relationship Conflict between Venture Capital and Entrepreneur," MPRA Paper 48005, University Library of Munich, Germany.
    2. Claire Champenois & Michel Devigne & François-Régis Puyou, 2016. "How Can Venture Capitalists-Owner Managers Conflicts Be Managed? If You Want Peace, Agree to Keep the Peace," Post-Print hal-01398988, HAL.
    3. Pengda Fan & Kazuo Yamada, 2020. "Same bed different dream composition of IPO shares and withdrawal decisions in weak market conditions," Small Business Economics, Springer, vol. 55(4), pages 955-974, December.
    4. Daniel Appelhoff & René Mauer & Veroniek Collewaert & Malte Brettel, 2016. "The conflict potential of the entrepreneur’s decision-making style in the entrepreneur-investor relationship," International Entrepreneurship and Management Journal, Springer, vol. 12(2), pages 601-623, June.
    5. Pengda Fan & Kazuo Yamada, 0. "Same bed different dream composition of IPO shares and withdrawal decisions in weak market conditions," Small Business Economics, Springer, vol. 0, pages 1-20.

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