Conflicts and Regrets in the Venture Capitalist-Entrepreneur Relationship
2014; Wiley; Volume: 53; Issue: 4 Linguagem: Inglês
10.1111/jsbm.12114
ISSN0047-2778
Autores Tópico(s)Entrepreneurship Studies and Influences
ResumoJournal of Small Business ManagementVolume 53, Issue 4 p. 949-969 Regular Article Conflicts and Regrets in the Venture Capitalist–Entrepreneur Relationship Dmitry Khanin, Corresponding Author Dmitry KhaninDmitry Khanin is visiting assistant professor in the Department of Management at the University of La Verne.Address correspondence to: D. Khanin, Department of Management, University of La Verne, 1950 3rd St., La Verne, CA 91750. E-mail: [email protected].Search for more papers by this authorOfir Turel, Ofir TurelOfir Turel is professor in the ISDS Department at Cal State, Fullerton.Search for more papers by this author Dmitry Khanin, Corresponding Author Dmitry KhaninDmitry Khanin is visiting assistant professor in the Department of Management at the University of La Verne.Address correspondence to: D. Khanin, Department of Management, University of La Verne, 1950 3rd St., La Verne, CA 91750. E-mail: [email protected].Search for more papers by this authorOfir Turel, Ofir TurelOfir Turel is professor in the ISDS Department at Cal State, Fullerton.Search for more papers by this author First published: 04 April 2014 https://doi.org/10.1111/jsbm.12114Citations: 15 Read the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onEmailFacebookTwitterLinkedInRedditWechat Abstract The goal of this paper is to examine whether conflicts with venture capitalists (VCs) could prompt chief executive officers (CEOs) to experience regret of action (regarding their poor partner choice) or regret of inaction (regarding their own inability to avert conflict). We argue that it is important to examine such feelings of regret that could motivate CEOs to change their financial intermediation and collaboration strategies in the future. We propose that VCs and CEOs may experience two types of conflict: (1) pacing conflicts regarding the direction and speed of venture advancement driven by perceived inequities in economic and social exchange; and (2) prerogative conflicts about the allocation of control rights and relationship issues driven by the perceived inequities in power relations. We hypothesize that pacing conflicts will be related to increasingly intense prerogative conflicts, whereas the latter will be associated with both types of CEO regret. The proposed model is tested with structural equation modeling techniques applied to the data collected from104 CEOs of VC-backed ventures. All the hypotheses are supported. Our main finding is that CEOs appear to be ambivalent about their conflict with VCs, regretting both their prior choices as an error of judgment (regret of action) and their own lack of initiative (regret of inaction). References Adams, J. S. (1965). " Inequity in Social Exchange," in K. Berkowitz (Ed.), Advances in Experimental Social Psychology (Vol. 2, pp. 267–299). New York: Academic Press. Amason, A. (1996). "Distinguishing the Effects of Functional and Dysfunctional Conflict on Strategic Decision Making: Resolving a Paradox for Top Management Teams," Academy of Management Journal 39(1), 123–148. Anderson, J. C., and D. W. Gerbing (1988). 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