The Influence of Venture Capitalists' Source of Finance on their Post-Investment Behavior in Investee Companies

Venture capital firms face agency and incentive problems that can require the use of non-financial inputs into the investee company. This article considers differences in the post investment behaviour of venture capital firms. The literature has paid little attention to the influence of the source of venture capital funding on this behaviour. In particular there has been no research into the behaviour of semi captive venture capital companies. Changes in the structure of venture capital in the U.K. have taken the form of a rapid growth in semi captive enterprises. The non-parametric statistical analysis determines the significant differences in the post investment behaviour of this group compared to independent and captive firms. The results confirm the need to separately identify semi captive venture capital companies and to recognise the heterogeneity of post investment behaviour according to the source of funding.