An Empirical Study of Relationship between Venture Capitalists Strategic Involvement and Portfolio Companies' Growth Performance

This paper examines the relationship between venture capitalists strategic involvement and portfolio companies' growth performance. The authors develop a research framework for analyzing the impact of venture capitalists strategic involvement on portfolio companies' growth performance, and then testify proposed hypotheses by applying the survey data from venture capital firms. The results of study indicate that venture capitalists strategic involvement in the post-investment is crucial factor that affects the portfolio companies' growth performance. Additionally, assisting with strategic issues and helping obtaining alternative sources of financing have considerable positive effects on portfolio companies' competitive performance and potential performance. Our study provides implications for both venture capitalists and entrepreneurs in cooperating with each other.