What is it about?
This article explores the importance of trust and reputation in new ventures that are hoping to raise venture capital.
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Why is it important?
Venture capitalists are moving from a more formal approach for selecting their investments to a more relational one. Other than traditional methods of selecting and protecting their investments, the venture capitalists are resorting to trustworthiness of entrepreneurs and reputation as vital deterrence mechanisms.
Perspectives
An entrepreneur may have an exceptional idea and excellent leadership potential. But, research indicates that, this may not be enough to rope in vital stakeholders such as venture capitalists on board. Its equally essential that the entrepreneur has a sound reputation of integrity and competency. Not just past reputation, but their day to day actions must conform with the highest ethical conduct resulting in a trust based relationship with their stakeholders, which will lead to a cooperative relationship.
Dr Swati Panda
Read the Original
This page is a summary of: Trust and reputation in new ventures: insights from an Indian venture capital firm, Development and Learning in Organizations, June 2013, Emerald,
DOI: 10.1108/dlo-02-2013-0003.
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