The Venture Capitalist: A Relationship Investor

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...