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Another hybrid?: Family businesses as venture capitalists
University of Skövde, School of Business. University of Skövde, Enterprises for the Future. (Strategiskt entreprenörskap (StrEnt), Strategic Entrepreneurship)ORCID iD: 0000-0002-8337-3472
University of Skövde, School of Business. University of Skövde, Enterprises for the Future. Witten Institute for Family Business, Universität Witten/Herdecke, Witten, Germany. (Strategiskt entreprenörskap (StrEnt), Strategic Entrepreneurship)
2017 (English)In: Journal of Family Business Management, ISSN 2043-6238, E-ISSN 2043-6246, Vol. 7, no 3, 329-350 p.Article in journal (Refereed) Published
Abstract [en]

Purpose – This paper addresses the phenomenon of venture capital firms which are also family businesses(VCFBs). The purpose of this paper is to explore and understand the phenomenon of VCFB by answering thefollowing questions: What are the features of professionalization in VCFBs? And, how do professionalizationand types of family businesses explain the strategies and governance of VCFBs?Design/methodology/approach – As an explorative case study, it maps the Swedish venture capital (VC)industry and compares two VCFBs and their business investments with regard to strategy and governance.Findings – By suggesting two major configurations, the study explains how family business developmentand levels of professionalization relate to differences in VCFBs’ strategies, which in turn, affect theirgovernance. The personal VCFB features active owners who personally take responsibility roles and stronglyfocus on customers and relationships. The administrative VCFB strongly focuses on predetermined financialmetrics, high ethical awareness among board members, and ongoing interplay between the active familyboard members and minority shareholders.Research limitations/implications – The study was conducted in Sweden and concerns Swedish VCFBs.The paper contributes to the literature by combining the two currently separate research streams, i.e. familybusiness and VC, highlighting the importance and consequences of family ownership in VC businesses.Practical implications – The present study provides stock market investors and stock analysts with adeeper understanding of VCFBs’ strategy incentives. By identifying the kind of VCFB and its relation tostrategy, more reasonable assessments and analyses of the VCFBs’ actions will be possible. Family firms willingto accept VC-finance should consider the type of VC and the potential consequences of family ownership.Originality/value – This study is the first to classify VC firms as family businesses. Moreover, it shows thefeatures of professionalization in VCFBs by suggesting a set of configurations.

Place, publisher, year, edition, pages
Emerald Group Publishing Limited, 2017. Vol. 7, no 3, 329-350 p.
Keyword [en]
Sweden, Case study, Family firms, Professionalization, Venture capital industry
National Category
Social Sciences Economics and Business Business Administration
Research subject
Strategic Entrepreneurship
Identifiers
URN: urn:nbn:se:his:diva-14187DOI: 10.1108/JFBM-02-2017-0006ISI: 000411210100005OAI: oai:DiVA.org:his-14187DiVA: diva2:1146132
Available from: 2017-10-02 Created: 2017-10-02 Last updated: 2017-10-06Bibliographically approved

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