Effects of relational capital and commitment on venture capitalists' perception of portfolio company performance

Dirk De Clercq, Harry J. Sapienza

Research output: Contribution to journalArticlepeer-review

116 Scopus citations

Abstract

In this study, we examine how relational capital and commitment affect a venture capital firm's (i.e., VCFs) perception of the performance of its portfolio companies (i.e., PFCs). That is, we examine how perceived performance is affected by the social nature of the relationship between the VCF and PFC. The study's hypotheses are tested by applying quantitative analyses to survey data collected from 298 U.S.-based venture capital firms. The data from the survey are complemented with additional information drawn from secondary data sources and interviews with several venture capitalists. We found that the amount of relational capital embedded in the VCF-PFC dyad and the extent to which the VCF is committed to the PFC are strongly related to perceived performance. We speculate that relational capital and commitment enhance learning, an effect that increases VCFs' perceptions of performance. Further, these perceptions of performance will also be amplified by the positive affect generated by relational capital and commitment. We discuss the limitations and contributions of our findings and provide directions for future research.

Original languageEnglish (US)
Pages (from-to)326-347
Number of pages22
JournalJournal of Business Venturing
Volume21
Issue number3
DOIs
StatePublished - May 1 2006

Keywords

  • Commitment
  • Relational capital
  • Venture capital

Fingerprint Dive into the research topics of 'Effects of relational capital and commitment on venture capitalists' perception of portfolio company performance'. Together they form a unique fingerprint.

Cite this