Conflicts between entrepreneurs and investors: the impact of perceived unethical behavior

Conflicts between entrepreneurs and investors: the impact of perceived unethical behavior This paper examines the impact of perceived unethical behavior by entrepreneurs, angel investors and venture capitalists on their conflict process. For this purpose, we use an embedded case study design to provide a diversity of perspectives on the topic at hand. From the eye of the beholder, i.e. investor, entrepreneur or both, 11 conflict situations were analyzed for any perceived unethical behavior. Based on findings from within- and cross-case analysis, we propose that perceived unethical behavior among venture partners triggers conflicts between them through increased fault attribution or blaming. Further, we propose that perceived unethical behavior affects venture partners’ choice of conflict management strategy and increases the likelihood of conflict escalation and of conflict having a negative partnership outcome such as failure or another form of involuntary exit. As such, this paper contributes to the entrepreneurship literature by addressing calls for more research on the darker sides of investor–investee relationships. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Small Business Economics Springer Journals

Conflicts between entrepreneurs and investors: the impact of perceived unethical behavior

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Publisher
Springer US
Copyright
Copyright © 2011 by The Author(s)
Subject
Economics / Management Science; Management/Business for Professionals; Microeconomics; Entrepreneurship; Industrial Organization
ISSN
0921-898X
eISSN
1573-0913
D.O.I.
10.1007/s11187-011-9379-7
Publisher site
See Article on Publisher Site

Abstract

This paper examines the impact of perceived unethical behavior by entrepreneurs, angel investors and venture capitalists on their conflict process. For this purpose, we use an embedded case study design to provide a diversity of perspectives on the topic at hand. From the eye of the beholder, i.e. investor, entrepreneur or both, 11 conflict situations were analyzed for any perceived unethical behavior. Based on findings from within- and cross-case analysis, we propose that perceived unethical behavior among venture partners triggers conflicts between them through increased fault attribution or blaming. Further, we propose that perceived unethical behavior affects venture partners’ choice of conflict management strategy and increases the likelihood of conflict escalation and of conflict having a negative partnership outcome such as failure or another form of involuntary exit. As such, this paper contributes to the entrepreneurship literature by addressing calls for more research on the darker sides of investor–investee relationships.

Journal

Small Business EconomicsSpringer Journals

Published: Oct 19, 2011

References

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