Vincenzo Butticé (Politecnico di Milano)
"Organization and Finance of Entrepreneurial Ventures: Looking beyond the Surface"
In this paper we examine the association between the organization and the modes of financing of entrepreneurial ventures. By means of a mixed-methods study, we show that after receiving outside equity from external investors, entrepreneurial ventures’ top management teams becomes larger and more specialized. The presence of external investors also influences the extent of the delegation of authority over strategic decisions within the team. However, this effect varies depending on the type of investor. When ventures are backed by corporate investors, the level of delegation of decision authority increases. By contrast, when ventures receive equity from independent venture capital investors, they tend to centralize authority over strategic decisions in management committees. This organizational arrangement is instrumental to the wish of independent venture capitalists to exercise greater control over these decisions.