How does an entrepreneur perceive the impact of organizational conflict induced by the relationship between their early stage venture and an external private equity investor: evidence from Indonesia.

Details

Supervisors

Gregoire, Philippe

Faculty

Louvain School of Management

Degree label

Master [120] en Ingénieur de gestion

Abstract

The role of conflicts has been the subject of extensive research in the area of psychology and sociology and lately, in the context of the entrepreneur-investor relationship. Previous research reveals that entrepreneur-investor conflict emerges when an entrepreneur raises equity finance to support growth in a high-tech or low-tech venture when one or both investor types (business angels and venture capitalists) invest in the venture. This thesis will aim to investigate the effect of perceived cognitive conflict on the venture’s perceived performance. The data was collected by means of a questionnaire which surveyed 21 high-tech entrepreneurs who had recently raised money for an early stage venture in Indonesia. It was found that that cognitive conflict significantly affects the entrepreneur’s perception of the venture’s performance. This effect is even stronger when the investor is highly involved in the venture’s development. In addition, we tested a set of interaction effects on this relationship. The implications of the findings suggest that it is important for the entrepreneur to build a good rapport with his/ her investor so that when conflict arises, it will improve the overall performance. Our contribution to the existing literature is through the examination of conflict between the entrepreneur and private equity investors, by testing already established hypotheses in a new institutional context which raises novel and interesting questions in the field of entrepreneur-investor relationship.