Exploration-exploitation dilemmas of venture capital funds: the role of organisational slack and horizons Online publication date: Thu, 04-Sep-2014
by Shmuel Ellis; Tamar Sagiv; Israel Drori
International Journal of Entrepreneurial Venturing (IJEV), Vol. 6, No. 3, 2014
Abstract: This paper analyses the investment decisions of venture capitalists (VCs). Drawing on March's conceptual exploration-exploitation framework, we examine whether organisational slack and organisational horizons can predict exploration and exploitation behaviours. Using data on VC funds that operated in Israel between 1990 and 2004, we explore two central VCs' dilemmas: the first, whether to invest in startups at their seed stage, and the second - when to opt for an exit. We found that whereas organisational slack and time horizons predicted explorative performance, exploitation was found as more dependent on situational factors and more strongly associated with investors' pressure. The findings are discussed in terms of the limited ability of top management teams to maintain an optimal balance between exploration and exploitation in organisations in general, and in VC funds in particular.
Online publication date: Thu, 04-Sep-2014
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Entrepreneurial Venturing (IJEV):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email email@example.com