ABSTRACT
In this chapter, our aim is to investigate how UK venture capitalists and entrepreneurs went about handling risk, when high-technology was involved (compare studies of this sort elsewhere e.g. by Liu and Chen, 2006, for Taiwan). Our evidence was gathered using the instruments discussed in Chapter 3. There, we explained how we interviewed both venture capitalists and entrepreneurs using two AQs of parallel design (Mitra, 2000; Liu and Chen, 2006). These allowed us to take respondents through a common agenda in face-to-face interviews (compare Fried and Hisrich, 1995, who used a less structured approach, but recorded the proceedings). In these interviews we covered: risk premia; investment time horizon; sensitivity analysis; expected values; predicting cash flows; financial modelling; decision making; and qualitative appraisal. During these interviews, which could take several hours, we gathered considerable bodies of evidence on how venture capitalists and entrepreneurs handled risk. For each interview, we gathered over 80 numerical responses, and over 40 qualitative (text) responses. These were coded, and then stored in a database for future analysis.
