The Monitoring of Venture Capital Firms

Abstract

This paper analyzes the monitoring of venture capital firms by their funds providers, which has been hitherto generally neglected by academic researchers. The changing nature of competition in a mature market has introduced increased pressures for the enhanced monitoring of venture capital firms, especially in relation to target returns and reporting requirements. The paper provides evidence on the nature and extent of these monitoring arrangements derived from interviews and a questionnaire survey of leading players in the UK market.