Entrepreneurial Passion and Venture Capitalists’ Willingness to Invest: The Role of Relational Capital
Venture capital investment has serious conflicts of interest and information asymmetry. Venture capitalists often make investment decisions on the basis of the passion of entrepreneurs, including enthusiasm and preparedness, in the process of interacting with them. Most of the previous research on r...
| Main Authors: | , , , , |
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| Format: | Article |
| Language: | English |
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Frontiers Media S.A.
2021-11-01
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| Series: | Frontiers in Psychology |
| Subjects: | |
| Online Access: | https://www.frontiersin.org/articles/10.3389/fpsyg.2021.728589/full |
| _version_ | 1818931817623846912 |
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| author | Hongtao Yang Hangyu Shi Yenchun Jim Wu Yenchun Jim Wu Lei Zhang Shuting Xie |
| author_facet | Hongtao Yang Hangyu Shi Yenchun Jim Wu Yenchun Jim Wu Lei Zhang Shuting Xie |
| author_sort | Hongtao Yang |
| collection | DOAJ |
| description | Venture capital investment has serious conflicts of interest and information asymmetry. Venture capitalists often make investment decisions on the basis of the passion of entrepreneurs, including enthusiasm and preparedness, in the process of interacting with them. Most of the previous research on relational capital have focused on the cooperative relationship between suppliers and buyers. However, the role of relational capital in the process of partnership between venture capitalists and entrepreneurs has not been revealed. On the basis of signaling theory, we explore the relationship between entrepreneurial passion and venture capitalists’ willingness to invest. We also examine the mediating and moderating roles of relational capital. This study takes 79 projects between venture capitalists and entrepreneurs as samples for empirical analysis to verify our hypothesis. Results show that entrepreneurs’ enthusiasm and preparedness have a significant positive impact on venture capitalists’ willingness to invest. Relational capital plays a mediating role between entrepreneurial passion and venture capitalists’ willingness to invest. Relational capital positively moderates the relationship between preparedness and venture capitalists’ willingness to invest but has no moderating effect between enthusiasm and venture capitalists’ willingness to invest. Results deepen the understanding of the relationship between entrepreneurs’ passion and venture capitalists’ willingness to invest, which has guiding significance for venture capital practice in China. |
| first_indexed | 2024-12-20T04:22:37Z |
| format | Article |
| id | doaj.art-2317bcd1e2b745b2a31b7c23adbe6d4a |
| institution | Directory Open Access Journal |
| issn | 1664-1078 |
| language | English |
| last_indexed | 2024-12-20T04:22:37Z |
| publishDate | 2021-11-01 |
| publisher | Frontiers Media S.A. |
| record_format | Article |
| series | Frontiers in Psychology |
| spelling | doaj.art-2317bcd1e2b745b2a31b7c23adbe6d4a2022-12-21T19:53:36ZengFrontiers Media S.A.Frontiers in Psychology1664-10782021-11-011210.3389/fpsyg.2021.728589728589Entrepreneurial Passion and Venture Capitalists’ Willingness to Invest: The Role of Relational CapitalHongtao Yang0Hangyu Shi1Yenchun Jim Wu2Yenchun Jim Wu3Lei Zhang4Shuting Xie5School of Business Administration, Huaqiao University, Quanzhou, ChinaSchool of Business Administration, Huaqiao University, Quanzhou, ChinaGraduate Institute of Global Business and Strategy, National Taiwan Normal University, Taipei, TaiwanLeisure & Recreation Administration Department, Ming Chuan University, Taipei, TaiwanSchool of Business Administration, Huaqiao University, Quanzhou, ChinaSchool of Business Administration, Huaqiao University, Quanzhou, ChinaVenture capital investment has serious conflicts of interest and information asymmetry. Venture capitalists often make investment decisions on the basis of the passion of entrepreneurs, including enthusiasm and preparedness, in the process of interacting with them. Most of the previous research on relational capital have focused on the cooperative relationship between suppliers and buyers. However, the role of relational capital in the process of partnership between venture capitalists and entrepreneurs has not been revealed. On the basis of signaling theory, we explore the relationship between entrepreneurial passion and venture capitalists’ willingness to invest. We also examine the mediating and moderating roles of relational capital. This study takes 79 projects between venture capitalists and entrepreneurs as samples for empirical analysis to verify our hypothesis. Results show that entrepreneurs’ enthusiasm and preparedness have a significant positive impact on venture capitalists’ willingness to invest. Relational capital plays a mediating role between entrepreneurial passion and venture capitalists’ willingness to invest. Relational capital positively moderates the relationship between preparedness and venture capitalists’ willingness to invest but has no moderating effect between enthusiasm and venture capitalists’ willingness to invest. Results deepen the understanding of the relationship between entrepreneurs’ passion and venture capitalists’ willingness to invest, which has guiding significance for venture capital practice in China.https://www.frontiersin.org/articles/10.3389/fpsyg.2021.728589/fullentrepreneurial passionventure capitalistswillingness to investrelational capitalsignaling theory |
| spellingShingle | Hongtao Yang Hangyu Shi Yenchun Jim Wu Yenchun Jim Wu Lei Zhang Shuting Xie Entrepreneurial Passion and Venture Capitalists’ Willingness to Invest: The Role of Relational Capital Frontiers in Psychology entrepreneurial passion venture capitalists willingness to invest relational capital signaling theory |
| title | Entrepreneurial Passion and Venture Capitalists’ Willingness to Invest: The Role of Relational Capital |
| title_full | Entrepreneurial Passion and Venture Capitalists’ Willingness to Invest: The Role of Relational Capital |
| title_fullStr | Entrepreneurial Passion and Venture Capitalists’ Willingness to Invest: The Role of Relational Capital |
| title_full_unstemmed | Entrepreneurial Passion and Venture Capitalists’ Willingness to Invest: The Role of Relational Capital |
| title_short | Entrepreneurial Passion and Venture Capitalists’ Willingness to Invest: The Role of Relational Capital |
| title_sort | entrepreneurial passion and venture capitalists willingness to invest the role of relational capital |
| topic | entrepreneurial passion venture capitalists willingness to invest relational capital signaling theory |
| url | https://www.frontiersin.org/articles/10.3389/fpsyg.2021.728589/full |
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