Journal article

CEOs' appraisals of venture capitalists' external and internal support: a transaction cost economics perspective

Dmitry Khanin, Ofir Turel

VENTURE CAPITAL | ROUTLEDGE JOURNALS, TAYLOR & FRANCIS LTD | Published : 2016

Abstract

Previous research has established that, in addition to provision of financing, venture capitalists (VCs) may add value to new ventures via different types of management support. In this paper, we propose that transaction cost economics (TCE) may complement other theoretical frameworks (e.g., agency theory, the resource-based view, knowledge-based theory, and resource dependence perspective) in explaining CEOs’ polar and ambivalent appraisals of the benefits and costs of different types of VC support and the overall value of VC assistance. Following TCE, we approach VC-funded new ventures as hybrids of markets and hierarchies. Hence, we assume that VCs help their portfolio companies both to e..

View full abstract