VC Effects on Business Efficacy

William Bains

Chapter 8 in Venture Capital and the European Biotechnology Industry, 2009, pp 109-122 from Palgrave Macmillan

Abstract: Abstract The last chapter described how VCs abrogate management authority, fail to provide the support they promise to management and instigate management change when it is counterproductive to the VC’s own goals of stock value appreciation and IPO. An explanation for this rather odd set of observations is that the VC has a deep knowledge of how a biotech business should be run and, while they do not have the time to provide that understanding to the company management, they nevertheless can direct the management to that end, and simply get rid of them if they disagree rather than try to work with them to change their mode of operation. This could be effective if the investors themselves had a clear idea about, or a good track record in, managing the affairs of investee companies. This chapter tests this by examining the effects of investors on the company’s business model, the next by examining their effects on the execution of that model.

Keywords: Business Model; Venture Capital; Investee Company; Biotech Company; Public Market (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-22726-2_8

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DOI: 10.1057/9780230227262_8

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