ABSTRACT
This chapter reveals a process of integrating qualitative studies and data mining in developing a theory. It explains the data of 2060 Venture capitals (VCs) and 12,414 investment events over a period of 17 years from SiMuTon database and analyze the network dynamics of this field in 1995–2011 by using the exponential random graph model method. The chapter discusses the term “guanxi circle” according to its narrow meaning including only small cliques rather than large communities. A Chinese person divides his or her social ties into several rings, and different rings imply different moral standards. It is common for indigenous Chinese research to categorize three types of guanxi. The chapter describes a network by its statistical features rather than the whole picture of the network in detail. There are many networks sharing a set of common network features. The chapter argues how the strength of a syndication tie between two VCs influences the new joint investment between them.
