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Differences between habitual and novice entrepreneurs in funding negotiations

  • Purpose Negotiations with venture capitalists (VCs) play a crucial role in the entrepreneurial financing process. Habitual entrepreneurs are generally able to secure more venture capital funding and on better deal terms than novices. This study investigates the disparities in negotiation competencies between habitual and novice entrepreneurs during VC funding negotiations. Design/methodology/approach This study employed a qualitative approach to investigate the variation in negotiation competencies between habitual and novice entrepreneurs, utilizing the negotiation competency model (NCM). The data analysis and interpretation adopted an inductive concept development approach. A total of 21 semi-structured interviews were conducted with seasoned VCs located in Europe, all of whom had actively engaged in funding negotiations with both habitual and novice entrepreneurs. Findings The findings revealed substantial disparities between novice and habitual entrepreneurs in VC negotiations. Although not all competencies of the NCM exhibited variances, the results indicate three primary dimensions contributing to these differences: expertise, reputation, and negotiation competence. Originality/value This study is groundbreaking as it represents one of the earliest empirical investigations into the entrepreneurial negotiation competencies within VC negotiations. The findings endeavor to narrow the gap between novice and habitual entrepreneurs in VC negotiations by pinpointing the distinct variations between these two groups, which hold significant practical implications. Furthermore, this study expands the conceptual framework of the NCM by identifying supplementary competencies within the realm of VC negotiations.

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Metadaten
Document Type:Article
Language:English
Author:Christian Glade, Peter KestingORCiD, Remigiusz SmolinskiORCiD, Dominik K. KanbachORCiD
Chairs and Professorships:Chair of Strategic Entrepreneurship
Center:Center for International Negotiation (CIN)
DOI:https://doi.org/10.1108/IJEBR-12-2022-1130
Parent Title (English):International journal of entrepreneurial behavior and research
ISSN:1355-2554
Volume:29
Issue:7
Date of Publication (online):2023/06/29
First Page:1644
Last Page:1663
Tag:Funding negotiation; Habitual entrepreneur; Negotiation competencies; Novice entrepreneur; Venture capital
Content Focus:Academic Audience
Peer Reviewed:Yes
Rankings:AJG Ranking / 3
VHB Ranking / C
SJR Ranking / Q1
Licence (German):License LogoUrheberrechtlich gesch├╝tzt