The consequences of conflict between the venture capitalist and the entrepreneurial team in the United Kingdom from the perspective of the venture capitalist

This research investigates the factors associated with the nature of conflict in the post-investment relationship between the venture capitalist (VC) and the entrepreneurial team (EP) in a venture that was funded by the venture capital firm, and as perceived by the VC. The study hypothesises a relationship between this perceived conflict and the post-investment performance of the investee firm. It examines both cognitive and affective conflict in two strategic areas-organisational goals and policy decisions-and relates them to the performance. The data was collected by a survey of VCs in the UK and a 60% effective response rate was achieved. The results show that conflict as disagreement can be beneficial for the venture performance, although at the same time, conflict as personal friction is negatively associated with performance. These impacts are in general stronger in the conflict related to organisational goals than to policy decisions.