This paper explores the venture capital (VC) market and extends the standard principal-agent problem between the investor and venture capitalist to show how it alters the interaction between the venture capitalist and the entrepreneur. The nature of the three way interaction results in a...

Venture capital firms’ ability to repeatedly make top performing investments suggests the importance of some aspect of organizational or human capital. However, it is an unanswered question as to what extent the important attributes of performance are a part of the firm’s organizational...