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The influence of the venture capitalist's governance activities on the entrepreneurial firm's control systems and performance

Wijbenga, F.H.; Postma, T.J.B.M.; Stratling, R.

Authors

F.H. Wijbenga

T.J.B.M. Postma



Abstract

Venture capitalists (VCs) contribute to entrepreneurial firms by engaging in governance activities, such as providing services and monitoring the entrepreneurial firm's operations and performance. This study examines the role and influence of the VC's governance activities on 93 Dutch entrepreneurial firms. Results suggest that while the VC's governance activities may help to stimulate the use of the entrepreneurial firm's control systems, they also moderate the relationship between the entrepreneurial firm's use of control systems and its financial performance. It appears in particular that cost control systems contribute positively to the entrepreneurial firm's financial performance when the VC provides service activities. However, the use of cost control systems tends to be negatively related to the entrepreneurial firm's financial performance when the VC is highly focused on monitoring.

Citation

Wijbenga, F., Postma, T., & Stratling, R. (2007). The influence of the venture capitalist's governance activities on the entrepreneurial firm's control systems and performance. Entrepreneurship Theory and Practice, 31(2), 257-277. https://doi.org/10.1111/j.1540-6520.2007.00172.x

Journal Article Type Article
Publication Date Mar 1, 2007
Deposit Date Mar 28, 2007
Journal Entrepreneurship Theory and Practice
Print ISSN 1042-2587
Electronic ISSN 1540-6520
Publisher SAGE Publications
Peer Reviewed Peer Reviewed
Volume 31
Issue 2
Pages 257-277
DOI https://doi.org/10.1111/j.1540-6520.2007.00172.x
Public URL https://durham-repository.worktribe.com/output/1567606