Christian Glade, Peter Kesting, Remigiusz Smolinski and Dominik K. Kanbach
This study explores the negotiation behaviors and strategies employed by experienced entrepreneurs to secure venture capital (VC) funding.
Abstract
Purpose
This study explores the negotiation behaviors and strategies employed by experienced entrepreneurs to secure venture capital (VC) funding.
Design/methodology/approach
Using a qualitative approach, we conducted interviews with 32 accomplished founders with track records in securing VC funding. Our conceptual underpinning rests upon an existing negotiation competency model. This study employed a systematic and iterative data analysis method, following an inductive approach grounded in Gioia et al.’s (2013) methodology to conceptualize the unprocessed interview data.
Findings
We identified three dimensions characterizing entrepreneurial negotiation behavior in VC negotiations: negotiation competencies, power tactics, and negotiation style. Furthermore, we identified specific behaviors in these dimensions and explored how entrepreneurs apply these skills in the VC context.
Research limitations/implications
This study contributes a nuanced understanding of entrepreneurs’ negotiation behaviors, opening avenues for further research on effective strategies in entrepreneurial finance.
Practical implications
Entrepreneurs can leverage the identified negotiation strategies to enhance their skills and navigate VC negotiations more effectively, potentially leading to better funding outcomes. Furthermore, training programs can be crafted to encourage the cultivation of these behaviors.
Originality/value
This study is the first to systematically examine the negotiation behaviors and strategies employed by experienced entrepreneurs in VC negotiations, revealing entrepreneurs’ specific behaviors and elucidating how these behaviors are employed within negotiations to provide practical insights.
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Christian Glade, Peter Kesting, Remigiusz Smolinski and Dominik Kanbach
Negotiations with venture capitalists (VCs) play a crucial role in the entrepreneurial financing process. Habitual entrepreneurs are generally able to secure more venture capital…
Abstract
Purpose
Negotiations with venture capitalists (VCs) play a crucial role in the entrepreneurial financing process. Habitual entrepreneurs are generally able to secure more venture capital funding and on better deal terms than novices. This study investigates the disparities in negotiation competencies between habitual and novice entrepreneurs during VC funding negotiations.
Design/methodology/approach
This study employed a qualitative approach to investigate the variation in negotiation competencies between habitual and novice entrepreneurs, utilizing the negotiation competency model (NCM). The data analysis and interpretation adopted an inductive concept development approach. A total of 21 semi-structured interviews were conducted with seasoned VCs located in Europe, all of whom had actively engaged in funding negotiations with both habitual and novice entrepreneurs.
Findings
The findings revealed substantial disparities between novice and habitual entrepreneurs in VC negotiations. Although not all competencies of the NCM exhibited variances, the results indicate three primary dimensions contributing to these differences: expertise, reputation, and negotiation competence.
Originality/value
This study is groundbreaking as it represents one of the earliest empirical investigations into the entrepreneurial negotiation competencies within VC negotiations. The findings endeavor to narrow the gap between novice and habitual entrepreneurs in VC negotiations by pinpointing the distinct variations between these two groups, which hold significant practical implications. Furthermore, this study expands the conceptual framework of the NCM by identifying supplementary competencies within the realm of VC negotiations.
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Alistair R. Anderson, Sarah L. Drakopoulou‐Dodd and Michael G. Scott
This paper explores the role of religion in the formation and development of the enterprise culture. The approach is that of legitimisation leading to an increase in environmental…
Abstract
This paper explores the role of religion in the formation and development of the enterprise culture. The approach is that of legitimisation leading to an increase in environmental munificence. It is argued that entrepreneurial activity was encouraged by the use of an entrepreneurial theology specifically articulated by Margaret Thatcher. Parallels are drawn to Max Weber’s work on the Protestant work ethic, particularly in the way that he argued that changes in the socio‐cultural framework of theology allowed, permitted and encouraged entrepreneurial action in what he called the new rational capitalism. Different aspects of the theological underpinnings of enterprise are discussed. The key findings are that religion played a significant role. It provided a Thatcherite rhetoric which became a moral crusade which was passionately pursued. Entrepreneurship was thus elevated to a new moral high ground; this was in spite of the strongly contested views of the Church. Interestingly, it appears that religious support for entrepreneurship, albeit in a modified form, continues with New Labour.
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Kimberly Gleason, Yezen H. Kannan and Christian Rauch
This paper aims to explain the fundraising and valuation processes of startups and discuss the conflicts of interest between entrepreneurs, venture capital (VC) firms and…
Abstract
Purpose
This paper aims to explain the fundraising and valuation processes of startups and discuss the conflicts of interest between entrepreneurs, venture capital (VC) firms and stakeholders in the context of startup corporate governance. Further, this paper uses the examples of WeWork and Zenefits to explain how a failure of stakeholders to demand an external audit from an independent accounting firm in early stages of funding led to an opportunity for fraud.
Design/methodology/approach
The methodology used is a literature review and analysis of startup valuation combined with the Fraud Triangle Theory. This paper also provides a discussion of WeWork and Zenefits, both highly visible examples of startup fraud, and explores an increased role for independent external auditors in fraud risk mitigation on behalf of stakeholders prior to an initial public offering (IPO).
Findings
This paper documents a number of fraud risks posed by the “fake it till you make it” ethos and investor behavior and pricing in the world of entrepreneurial finance and VC, which could be mitigated by a greater awareness of startup stakeholders of the value of an external audit performed by an independent accounting firm prior to an IPO.
Research limitations/implications
An implication of this paper is that regulators should consider greater oversight of the startup financing process and potentially take steps to facilitate greater independence of participants in the IPO process.
Practical implications
Given the potential conflicts of interest between VC firms, investment banks and startup founders, the investors at the time of an IPO may be exposed to the risk that the shares of the IPO firms are overvalued at offering.
Social implications
This study demonstrates how startup practices can be extended to the Fraud Triangle and issue a call to action for the accounting profession to take a greater role in protecting the public from startup fraud. This study then offers recommendations for regulators and standards entities.
Originality/value
There are few academic papers in the financial crime literature that link the valuation and culture of startup firms with fraud risk. This study provides a concise explanation of the process of valuation for startups and highlights the considerations for stakeholders in assessing fraud risk. In addition, this study documents an emerging role for auditors as stewards of proper valuation for pre-IPO firms.
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Alun Bevan, Sheila Apted, Stuart Hannabuss and Wilfred Ashworth
As Joe Shams moved towards the exit he caught a glimpse of a familiar cover‐pic half‐hidden behind a porta‐reader. Recognising it as a copy of Philip K Dick's Counter clock world…
Abstract
As Joe Shams moved towards the exit he caught a glimpse of a familiar cover‐pic half‐hidden behind a porta‐reader. Recognising it as a copy of Philip K Dick's Counter clock world, he knew that it had been planted there by the library's security division in another of their far from subtle attempts to trap a ‘Dick‐'ead’.
Before we start looking for information on a specific company, it would be logical to first find our what type of company it is. Broadly speaking, companies fall into two major…
Abstract
Before we start looking for information on a specific company, it would be logical to first find our what type of company it is. Broadly speaking, companies fall into two major categories, namely, private and public. A private company could in turn be a sole proprietorship, a partnership or an incorporated enterprise. A public company, on the other hand could be a parent company or a subsidiary, affiliate or a division of the parent. In addition, it is possible for either type of company to be a franchise or be of foreign origin. For our purposes, we may define a public company to be a company whose stock is listed on a national or a regional stock exchange and any company that is not public is a private company. Although the process of business formation is beyond the scope of this review, it would facilitate one's research if one is familiar with sources that provide information in this area. Besides, there is a constant demand in business libraries for information on how to set up businesses.
This essay is a philosophical exploration of the concept of the interesting. It draws a line from philosophical aesthetics to the philosophy of pedagogy and argues that an…
Abstract
This essay is a philosophical exploration of the concept of the interesting. It draws a line from philosophical aesthetics to the philosophy of pedagogy and argues that an awareness of the nature of the interesting – an awareness of what makes something interesting, aesthetically – can help improve the pedagogical impact of academic lectures. Specifically, the essay argues that something that strikes us as interesting is also something that engages us. Hence, that making lectures interesting will lead to student engagement and to an enhanced learning experience.
With regard to rhetorical composition, the present essay attempts to enact the aesthetical principles that it discusses. Thus, it will not abide by the standard rhetorical academic conventions. (It attempts to be interesting, after all.)
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It is eminently fitting that the Greeks who gave us their word for “speaking fair” should also have supplied us with the ultimate exemplification of its use. They were wont to…
Abstract
It is eminently fitting that the Greeks who gave us their word for “speaking fair” should also have supplied us with the ultimate exemplification of its use. They were wont to refer to the Furies, a group of avenging goddesses, as the Eumenides or “The Fair Ones.” Since the Furies were imagined as having a batlike shape which was adorned with a profusion of snakish hair, they were not fair at all, but rather terrifying, intimidating in the highest degree. To euphemize a phenomenon is to call it something other than what it most particularly is, anything at all provided the new designation is gentler, milder, less offensive, less threatening. It is even possible, as in the case of the Furies renamed Fair Ones, to effect a 180‐degree reversal of meaning.
Stephen Brown and Anthony Patterson
An introduction to the special issue “A taste of paradise”. Discusses the various representations of paradise over time and asserts that these have always reflected the society…
Abstract
An introduction to the special issue “A taste of paradise”. Discusses the various representations of paradise over time and asserts that these have always reflected the society that produced them. Stresses that marketing is unavoidably implicated in our perceptions of paradise. Refers to the different notions of marketing paradise held by the various authors of the papers in the special issue.
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Thomas A. Bryant and Joseph E. Bryant
The modern economy of North America has been built on nearly five centuries of natural resource exploitation. Wetlands have been part of that pattern, with drainage and filling…
Abstract
The modern economy of North America has been built on nearly five centuries of natural resource exploitation. Wetlands have been part of that pattern, with drainage and filling used to convert them to higher economic values. Ecological research and social value changes have been accumulating in the last half of the twentieth century, however, and suggest that such behaviour is becoming less acceptable. Whereas the social incentives for entrepreneurs used to be unmitigated in their encouragement of the elimination of wetlands, evolving values suggest a radical restructuring is under way. The dividing line between heroic entrepreneurial exploitation and vilification for ecosystem damage is best understood as a shifting zone of uncertain values. Prudent entrepreneurs will monitor those value shifts closely.