chapter  4
16 Pages


The empirical context within which venture capital functions has been established. So too have the broad analytical principles which may be brought to bear on the relationship between the venture capital investor (VCI) and the mature small firm (MSF). However, the detailed ways in which investor and investee, in this sense, interact, especially as regards their handling of information and management of risk, have remained unexplored. This is a matter of fairly intricate analysis in terms of economic theory, and the lines of reasoning now to be developed to fill this gap in the structure of the book may not be accessible to all readers. However, the main points established are both important and, if mastered, highly illuminating.1 If these lines of reasoning cannot be followed in detail by the reader, then a beneficial and pragmatic alternative, from the viewpoint of understanding the broad thrust of argument upon which this book’s research is based, is to note the content of the sequence of propositions laid out in the development of material below.