Conflicts between venture capitalists and CEOs of their portfolio companies

Prior research has established that venture capitalists (VCs) and CEOs of their portfolio companies often disagree on venture policies. Such disagreements can escalate into cognitive conflicts. Relationship-based, or affective, conflict may also arise between VCs and CEOs. This paper examines the antecedents and dynamics of such VC-CEO conflicts and their effects on CEOs’ expectations as to what financial intermediaries they would like to choose for their new ventures. Based on a survey of 104 CEOs of VC-backed ventures, we establish that, following conflict with VCs, CEOs may elect to avoid using any financial intermediaries, or to choose business angels or corporations as financial intermediaries. Alternatively, CEOs may decide that they still want to work with VCs in the future and strive to ameliorate their collaboration with VCs.