In this chapter, we introduce venture capital, a subset of the private equity asset class that focuses on investments in new or growing privately-held companies with high potential. We specifically address why venture capital markets exist; what the different venture capital models are; what...

Financing innovative, high-growth ventures are difficult given their reliance on intangible knowledge-based assets, high probabilities of failure and asymmetries between entrepreneurs and financiers. Venture capitalists have developed systems over time to cope with this uncertainty and...

Using a resource dependence perspective, we theorize and show that non-venture-capital-backed ventures founded in U.S. states with a lower availability of venture capital (VC) are more likely to relocate to California (CA) or Massachusetts (MA) — the two VC richest states — compared to...

Building upon prior research that demonstrates how the limited knowledge of finance alternatives of entrepreneurs may cause suboptimal finance decisions, this paper examines how entrepreneurs’ human and social capital influence their knowledge of finance alternatives. For this purpose, we use...