Entrepreneurial learning about the venture capitalist community

Abstract

Entrepreneurs are exceptional learners (Smilor, 1997) but are also exceptional at creating value. Do venture capitalists and institutional investors accurately value the efforts of the entrepreneur? We believe that venture capitalists and the investment community combine economics and market criteria with institutional and social criteria in making their investment decisions towards entrepreneurs. This paper provides a conceptual framework on how entrepreneurs need to “learn” the rules and norms of such institutional signals of venture capitalists and the investment community, in order to receive the appropriate compensation for their entrepreneurial business efforts.

Keywords

• Entrepreneurs
• venture capitalists
• institutional investors
• investment community