The Pursuit of Innovation, Venture Stage and Capitalist-Entrepreneur Relations

Innovative new ventures constitute a disproportionately large source of economic growth, and the amount of venture capital flowing into such ventures is increasing. A key component in the success of venture -capital-backed firms is the relationship between the lead venture capitalist (VC) and the venture 's founding entrepreneur (E). We examined the impact of innovativeness and venturestage on VC-E relations in 51 venture -capital-backed firms and found: (1) greater marketing innovativeness in ventures associated with greater openness in VC-E pairs, (2) greater technological innovativeness in ventures associated with greater conflict in VC-E pairs, and (3) more frequent VC-E interaction in earlier stage ventures. We found that the relationship between technological innovativeness and openness of VC-E relations depended upon the venture 's stage : Studies the effects of technological innovations and venturestage on the relationship between venture capitalists and entrepreneurs in the United States. Key components in the success of venture -capital-backed firms; Emergence of innovative ventures as a large source of economic growth. [ABSTRACT FROM AUTHOR]