Controlling your own success

摘要

The relationship between corporate investors and a new venture can be delicate to manage. With an equity investment comes multiple conflicting priorities and significant pressure from those providing the financing. New ventures can both benefit and suffer from corporate investment, but striking the right balance in the relationship between the two is crucial to the success of any new venture. While corporate investors are ultimately looking to maximize the firm value, and minimize resource misappropriation, new ventures are looking to accept financial security, but avoid resource misappropriation on the part of the corporate investors. The level of control investor management seeks to have over the investee is a crucial factor in the success of a new venture. Poor management control can limit and fatally hinder the growth of a venture. Therefore, investees need to understand the types of management control executed by corporate investors to mitigate or avoid any potential destruction of value or ability caused by poor corporate relationships.