Asia Pacific Journal of Management

, Volume 29, Issue 3, pp 573–596

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

Article

DOI: 10.1007/s10490-010-9212-x

Cite this article as:
Lim, K. & Cu, B. Asia Pac J Manag (2012) 29: 573. doi:10.1007/s10490-010-9212-x

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.

Keywords

Entrepreneurship Venture capital Disagreement and advice Social networks 

Copyright information

© Springer Science+Business Media, LLC 2010

Authors and Affiliations

  1. 1.Melbourne Business SchoolCarltonAustralia
  2. 2.Boston Consulting GroupSingaporeRepublic of Singapore

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