Early-stage new technology-based businesses: Interactions with venture capitalists and the development of accounting techniques and procedures

Management control systems in innovation companies: a literature based framework

“…Therefore results control is appropriate in order to ensure that tasks are accomplished as agreed on and that organisational members strive for the achievement of organisational objectives. It has been shown that venture capitalists use their power over their investee's management in order to influence the type of information they receive, its quality and frequency (Sweeting 1991;Mitchell et al 1995;Wright and Robbie 1996). Furthermore it has been reported that VC financing is positively related to the use of financial budgets (Bruining et al 2004), operating and cash budgets (Davila and Foster 2005) and more frequent reporting (Robbie et al 1997;Bruining et al 2004).…”

“…Sweeting 1991;Mitchell et al 1997;Davila 2005;Foster 2005, 2007;Sandino 2007;Silvola 2008). The crucially important role of venture capital (VC) as a source of financing in particular for innovation and high-technology companies is well acknowledged (Rosenstein et al 1993).…”

Buy‐ins, Buy‐outs, Active Investors and Corporate Governance

“…There were, however, no significant differences in the performance of businesses subject to differing levels of involvement. Sweeting (1991), however, finds that venture capitalists 'tend to leave well alone when there is confidence in what is going on and the people in charge, and, alternatively, they are concerned and proactive to put matters right when this is not so' (p. 18). While venture capitalist may take control when things go seriously wrong, such action has to be exercised with care since, as Sweeting points out, to act precipitously may destroy carefully nurtured relationships and commit the venture capitalists to unknown amounts of time to put matters right.…”

“…These mechanisms include staging of the commitment of investment funds, convertible financial instruments which may give financiers control under certain conditions, basing compensation on value created, and preserving mechanisms to force agents to distribute Volume 4 Number 4 October 1996 capital and profits. The study by Sweeting (1991) suggests however, that relationships need to be such that problems are revealed to the venture capitalist at an early stage rather than being left to fester and emerge as a surprise at a later stage. Hatherly, et.…”

Evolution and Change: An Analysis of the First Decade of the Uk Venture Capital Industry

“…Classic venture capital activity, both in start-up and early stage deals, needs specialist skills from the venture capital provider (Roberts, 1991a;and Sweeting, 1991). The costs associated with selecting and subsequently supporting such activities allow few economies of scale or scope and have increasingly become the focus of smaller, more specialist venture capital firms.…”