ELSEVIER
NEW VENTURE TEAMS'
ASSESSMENT OF LEARNING
ASSISTANCE FROM
VENTURE CAPITAL FIRMS
JAY B. BARNEY
Ohio State University
LOWELL W. BUSENITZ
University of Houston
JAMES O. FIET
Clemson University
DOUGLAS D. MOESEL
Lehigh University
EXECUTIVE Prior research examining whether venture capital firms (VCs) add value to
S ~ Y the ventures in their portfolios by advising their new venture teams (NVTs)
has led to inconclusive results. Whereas most prior studies have assumed
that NVTs value VC assistance, this study tests for the possibility that they
differentially value two different types of VC assistance-business manage-
ment and operational. We collected data by surveying 837firms identified
in the Venture Capital Journal that had received financing from venture capital firms. Only firms that
received first-round financing were included in our analysis, which reduced our sample size to 205
firms.
Our central finding is that systematic differences exist among NVTs in their evaluation of learning
assistance from VCs. Even though VCs can chose their own level of involvement with an NVT, successfully
improving venture performance through nonfinancial assistance at least partially depends upon the
extent to which the NVT values VC input. Our results indicate that NVTs with more industry experience
and longer team tenure in the current venture are negatively related to both business management advice
and operational assistance offered by their VCs. However, when an NVT has previously worked together
and when its primary experience is from another industry, it tends to welcome business management
Address correspondence to Lowell W. Busenitz, Department of Management, University of Houston, Houston,
TX 77204-6283.
The authors wish to thank Harry Sapienza and two anonymous reviewers for their comments on earlier versions
of this article.
Journal of Business Venturing 11,257-272
© 1996 Elsevier Science Inc.
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