Author： Panda Swati Dash Shridhar
Publisher： Emerald Group Publishing Ltd
ISSN： 1477-7282
Source： Development and Learning in Organizations: An International Journal, Vol.27, Iss.4, 2013-06, pp. : 9-11
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Abstract
Purpose - This article aims to explore the importance of trust and reputation in new ventures that are raising venture capital. Design/methodology/approach - The article is based on an interview with founding partners of an eminent Indian venture capital firm, conducted by an independent interviewer. Findings - Venture capitalists are moving from a more formal approach for investing to a more relational one. Other than traditional methods of selecting and protecting their investments, the venture capitalists are resorting to trustworthiness of entrepreneurs and reputation as vital deterrence mechanisms. Practical implications - The findings can be utilized to reduce contracting costs and develop a more efficient venture capitalist-entrepreneur relationship. Originality/value - The article proposes new criteria which the entrepreneurs should be aware of before trying to raise venture finance.
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