Venture Capital and Enterprise

Abstract

Entrepreneurship usually implies the ability of individuals or key groups to found, run, or expand an enterprise in a successful fashion. More often than not this term is seen as synonymous with a heightened sense of innovation and risk-taking. All enterprises need capital investment, either in their initial stages, or through subsequent growth phases. A significant proportion of this investment may need to come from outside the enterprise. The role of external investors, whether individuals or institutions, therefore frequently forms one of the vital contextual factors enabling entrepreneurship to thrive. Viewed from another perspective, however, the action of investors or investing institutions can itself be understood as entrepreneurial. Individuals or banks, in seeking out or in making decisions over investments or investment strategies, may fulfil many of the criteria associated with the entrepreneurial firm. Entrepreneurship, therefore, is woven into the fabric of the capital investment process, both internally within the firm, through external relationships the firm may have with providers of funds, and within funding individuals or institutions themselves. This process and the relationships which develop vary considerably in their origins and effectiveness due to particular historical contexts.