A PERFECT MATCH? HOW ENTREPRENEURS EVALUATE AND DECIDE ON VENTURE CAPITAL FIRMS

Alexander Schröder, Christian Schlereth, Christoph Hienerth and Franz Kellermanns

Journal of Business Research, 2025, vol. 200, issue C

Abstract: In entrepreneurial ecosystems, the match between venture capital firms and entrepreneurial firms is of high importance. If there is a good fit, startups can grow substantially, and venture capital firms can succeed financially, creating economic value. Bad choices can lead to inefficiencies and market failure. Taking the perspective of the entrepreneurial firm, we conducted a discrete choice experiment and analyzed how entrepreneurs decide for or against venture capital offerings. The experiment was based on five important attributes of venture capital offerings as well as the choice between independent venture capital (IVC) and corporate venture capital (CVC) firms. We found that entrepreneurs rated equity and control attributes as more important than non-financial support or reputation. Furthermore, preference heterogeneity was high when choosing between IVC and CVC. Experience as an entrepreneur or as an investor provided only limited explanatory power to explain preference heterogeneity. Our study not only contributes to an ongoing debate about the choices and consequences that entrepreneurial firms face but also informs venture capital firms on how to best develop and present their offerings.

Keywords: Entrepreneurship; Venture Capital; Corporate Venture Capital; Investor Selection (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:200:y:2025:i:c:s0148296325004448

DOI: 10.1016/j.jbusres.2025.115621

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