Chapter 2: Conceptual and Theoretical Reflections on Venture Capital Research
2 Conceptual and theoretical reﬂections on venture capital research Harry J. Sapienza and Jaume Villanueva Introduction Entrepreneurship and early venture capital literature As indicated in Chapter 1 the research on venture capital1 dates back at least to the late 1960s (for example Briskman, 1966; Aggarwal, 1973; Wells, 1974; Poindexter, 1976) when the industry itself was in its infancy. Whereas these early studies in venture capital tended to focus on the eﬃciency of venture capital as an investment vehicle or on the decision criteria used by venture capitalists to assess entrepreneurs and opportunities, other areas of the more general entrepreneurship literature focused on the nature of the entrepreneur and on conditions of founding. Thus, early on, venture capital research contributed primarily in the areas of economic implications of this ‘new’ organizational entity (venture capital) as a ﬁnancing tool. In truth, the entire ﬁeld of management or business ‘science’ itself was just forming. Whereas the ﬁeld of economics was comparatively well-developed, the examination and study of business organizations as atomistic entities worthy of study in their own right was just emerging. Through the 1980s and into the early 1990s, interest in venture capital and its unique problems and contributions expanded. For entrepreneurship research in general, the decade began with a focus on the entrepreneur and ended with a focus on the entrepreneurial process of new venture creation. Venture capital research complemented this development by beginning to unravel the mysteries of the venture capitalist–entrepreneur dyad in this process of venture...
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