ABSTRACT
Chapter 4 reviews the various theoretical frameworks that may impact on the variables affecting venture capital fund performance, principally in the context of the VC/entrepreneur relationship. A number of theoretical perspectives have been applied to VC investing in prior research. Some theories dominate, notably agency theory, real options theory and prisoner’s dilemma theory. The current study is investigating many different variables that affect the VC investment process, and consequently fund performance, and therefore a multi-theoretical framework for the current research is proposed. The framework combines a theoretical and practical approach. The performance variables discussed in Chapter 3 are linked to appropriate theories in this chapter.
