This study suggests the contingency framework evaluating the effects of monitoring and assistance of venture capital and conducts empirical analysis using survey data.
The main objectives of this thesis are as follows:
1. Investigating the relationship between the types of assistance provided by venture capital and characteristics of venture capital firm.
2. Evaluating the effects of monitoring and assistance of venture capital on the venture business performance.
3. Analyzing how different the effects of each type of assistance are in various situations.
Twenty-nine monitoring and assistance activities are catagorized into 3 types-Strategic, Administrative, and Operating-according to Ansoff(1965) and three contingency variables-Capability of venture business, Enviromental hostality, and Venture business growth stage-are derieved from literatures about venture business success/failure.
The data used for validating this conceptual model are collected from 34 korean venture capital firms and 49 venture businesses that received assistance from the above venture capital. Multiple regression analysis and Correlation analysis are mainly employed to test the hypotheses.
The Major findings of this thesis are as follows:
1. The more active in monitoring and assistance for funded venture businesses, the higher success rate and resource capability of the venture capital firm.
2. Monitoring and assistance of venture capital has positive influence on the venture business performance, especially the survival and growth of venture business.
3. Operating assistance has greater impacts on the venture business performance than any other types of assistance in the short-term.
4. Results of contingency analysis imply that strategic and operating assistance is more positively related to growth of the venture business in hostile enviroments than benign enviroments and Monitoring and assistance of venture capital is more positively related to the venture business performance in later stage of growth than in earlier stage of growth with respect to profitability of the venture business but vice versa with respect to growth and survival of the venture business.
5. Generally, korean venture businesses need raising further rounds of finance most but in stage of growth, needs strategic assistance in earlier stage and needs operating assistance in later stage.
6. According to results of multivariate analysis, venture business performance is more influenced by exogenous factors such as environments than endogenous factors and operating assistance of venture capital has most powerful impacts on the venture business performance among three types of assistance.
But the findings should be interpretated with caution, since this study has several limatations in measurement such as time-lag and operationalization of behavioral characteristics of entrepreneur.
Further research with larger sample and refined methdology will be needed to improve this study.