Knowledge strategy of venture capitalists and the decision model

Abstract

This paper analyses knowledge strategy space and decision model of venture capitalists (VCs). Drawing from the knowledge-based view, we examine the space of knowledge strategy for venture capitalists (VCs). Development of internal knowledge is the basic strategy for their acquisition of knowledge; Seeking of knowledge resources from the external world is their expansion strategy. The syndicated investments have been the best channels for inter-organizational learning for VCs. Furthermore, we develops a knowledge strategy decision model for VCs based on transformative economic society and probes into the influence of transformation of economic society on the choices of VCs towards knowledge strategy as well as the dynamic process of transition of social capital from a "Guanxi"-based ones to an "embedded" type. The model could be expanded to analyze the influence of firm size and project innovativeness on the knowledge strategy decision of VCs.