chapter  13
22 Pages

THE SUPPLY OF VENTURE CAPITAL AND THE DEVELOPMENT OF INVESTEES’ ACCOUNTING INFORMATION SYSTEMS

WithWITH FALCONER MITCHELL AND NICHOLAS G.TERRY

One of the most important events in the early life cycle of any entrepreneurial firm which harbours serious growth ambitions is the infusion of external capital (Reid 1996a). This event can lead to significant changes in the firm’s ownership composition, and affects its subsequent rate of growth and, consequently, its size and organizational structure. It is within the context of such changes that the managerial demand for information about the firm is stimulated. This chapter examines the origins and characteristics of developments in the accounting information systems (AIS) of firms which are going through this stage. It does so by investigating the consequences of venture capital1

intervention for the entrepreneurial firm (MSF), particularly as regards the characteristics of its accounting information system (AIS).