How Relationship Investments and Knowledge Sharing Generate Value in Venture Capital Partnerships

What is it about?

This conceptual study examines how venture capitalists (VCs) and entrepreneurs generate relational rents—shared value that neither could achieve independently—through collaboration grounded in mutual commitment and learning. The authors focus on how relationship-specific investments and knowledge-sharing routines contribute to this joint value creation, and how these effects are shaped by trust and knowledge relatedness between partners. The framework moves beyond transactional views of venture capital toward understanding the relational mechanisms that sustain cooperation and innovation. The authors argue that relationship-specific investments—time, effort, and resources devoted uniquely to a partnership—foster long-term collaboration by curbing opportunism and signaling commitment. Knowledge-sharing routines further allow VCs and entrepreneurs to exchange expertise and build joint capabilities. These effects intensify with trust, which encourages openness and reduces fears of misuse. However, knowledge sharing works best at moderate relatedness, where partners share understanding yet retain complementary expertise.

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Photo by Vitaly Gariev on Unsplash

Photo by Vitaly Gariev on Unsplash

Why is it important?

This research develops a theoretical model linking relationship-specific investments and knowledge-sharing routines to the creation of relational rents in venture capital relationships. By incorporating trust and knowledge relatedness as moderating factors, it shows how social and cognitive alignment can strengthen or limit joint value creation. Integrating insights from the knowledge-based view, social exchange theory, and relational governance, the study explains how collaboration drives competitive advantage. The study is particularly timely as modern venture ecosystems increasingly depend on relational and knowledge-based collaboration rather than purely financial mechanisms. It highlights that fostering trust and balanced knowledge overlap—alongside deliberate, relationship-specific investment—enables both venture capitalists and entrepreneurs to co-create value and sustain long-term success in high-uncertainty environments.