Abstract

Based upon a series of case studies, this article explores the role of the venture capitalist in management. In addition to money, venture capitalists provide a variety of inputs to the firms in which they invest, such as operating services, discipline, general business knowledge, image, networks, and moral support. Venture capitalists have three sources of power over management-money, personal relationships, and formal power. They attempt to influence managers to follow their "dominant logic," which generally stresses formal planning, a profit orientation, organizational development, patience, and strategic focus.