Does agency theory or stewardship theory apply to the venture capitalist-entrepreneur relationship?

摘要

Individuals, who have great ideas they want to realize, face the problem of how to be able toraise capital. Instead of just giving up their wish to establish a company that could besuccessful they can get the financial support from venture capitalists. In return for theirfinancial help to the entrepreneur, venture capitalists normally demand a high return on theirinvested capital. Although this may seem as a very easy way to raise capital, venture capitalfunding is surrounded by a number of risks and special caution has to be taken to prevent anybig losses. The main problem facing the venture capitalist is the asymmetric informationbetween the venture capitalists and the entrepreneur and we have examined this problemthrough the agency and stewardship theories. Depending on how the two different parties acttoward each other and how they see themselves in context of the organization, this will haveeffects on the success for the venture.For this thesis we have chosen to do a case study of Chalmers Innovation and had aninterview with their investment manager Per Stenman. We have also used secondary data tooutline a theoretical framework, which we will use to test the probability to how the actualprocess is executed. Our findings are that venture capital firms use contracting to prevent theproblems that can occur with agency theory and with the help of contracting a principalstewardshiprelationship will emerge where no agency costs occurs.For further research it would be interesting to investigate the entrepreneur’s perception of thecollaboration as well as interview other venture capital firms and see if there are differences inhow they work