Venture Performance Indicators: Two Artifacts towards enhanced Transparency in the Venture Capital Industry

Item Type Journal paper
Abstract The landscape of measurable venture key performance indicators (KPIs) in the venture capital (VC) industry is dispersed and opaque, which is why they have not yet played the supportive decision-making role they potentially could have played so far. The limited and asymmetric information between the entrepreneurs and the investors leads to inefficient capital allocations, frictions, and agency problems. We address this transparency issue with a design science research approach by developing two artifacts: one for investors and one for entrepreneurs. For investors, transparency is increased by a portfolio reporting solution, which provides a useful “how-to-guide” on formal venture reporting processes and structures, supporting future venture selections, portfolio monitoring, and value-adding activities. For relevant groups of entrepreneurs, transparency is increased by a benchmarking solution, which provides useful descriptive insights on measurable venture KPIs and their relationships to venture milestones along the life cycle, such as funding events. The post-development evaluations of the artifacts show that practitioners have a strong need for such transparency. We conclude that beyond structural challenges of the venturing environment, such as pace, dynamics, and the inherent uniqueness of ventures, also the fragmentation of the VC industry seems to pose a key challenge to the establishment of a direct linkage between venture performance and measurable venture KPIs.
Authors Wolff, Yaro
Language English
Subjects business studies
Refereed No
Date 2021
Depositing User Corinne Metzger-Wyder
Date Deposited 10 May 2021 13:32
Last Modified 20 Jul 2022 17:45
URI: https://www.alexandria.unisg.ch/publications/263141

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Wolff, Yaro (2021) Venture Performance Indicators: Two Artifacts towards enhanced Transparency in the Venture Capital Industry.

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https://www.alexandria.unisg.ch/id/eprint/263141
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