With rapid development of China’s capital market, corporation
between start-up firms and venture capitalists has entered a booming period.
However, from 2001 to 2016, twenty two famous entrepreneurial ventures in China
have experienced dramatic conflicts between entrepreneurs and venture
capitalists, and as a result, sixteen firm founders had to leave their own
ventures. In the current study, we take an organizational behavior perspective
to address the question of why entrepreneurs-VC conflicts are inevitable in
practice and how conflicts unfold over time. Case study analysis and
semi-structured interviews are used to provide insights into the topic at hand.
And by analyzing twenty two cases and interview results, it is found that three
major reasons, among many, contribute most to entrepreneur-VC contradiction,
and they are conflict between corporate culture and venture professionalization
(process conflict), different or even contradictory preference of how to
accomplish tasks (task conflict), and disputes in individual characteristics
and behavior patterns (relationship conflict).
JEL classification numbers: G24
Keywords: entrepreneur, venture capitalist, intragroup conflict, organizational