The Venture Capital Feedback Cycle: A Critical Review and Future Directions

2020. Entrepreneurship Research Journal. DOI: 10.1515/erj-2017-0205

Juan Pablo Torres C

Abstract:

A framework of the venture capital process, encompassing the (1) preinvestment phase, (2) management phase, (3) exit phase, and the interrelationships between them was developed into a cycle using the exit phase in a feedback loop. The review of 166 articles from top-tier, Grade 4, journals suggests that most prominent Entrepreneurial & Management (E&M) literature assesses the VC operating environment, and the managerial expertise and skills of both VC firms and entrepreneurs independently. Finance Literature, however, centers its independent analysis on contracts, risk, returns and VC governance. A network analysis follows comparing E&M and Finance literature venture capital research agendas by country, author, institution, and journal. Finally, the manuscript identifies trends and future areas for venture capital cycle research by comparing and exploring the current state and progress of the venture capital cycle in Entrepreneurial literature.

Palabras claves: Venture capital cycle, Venture capitalist, new ventures, VC-backed firms

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