How do Venture Capitalists Handle Risk in High-Technology Ventures?

    Research output: Chapter in Book/Report/Conference proceedingChapter


    This article presents new empirical evidence, obtained by fieldwork methods, on the risk-handling practices of investors in the U.K. venture capital industry. Its focus is on high-technology firms and the techniques their venture capital backers use for risk management. The active areas of risk management were explored under the headings of risk premia, investment time horizons, and sensitivity analysis. Investors' attitudes to risk were found to imply a coherent 'high to low' risk spectrum. Those factors which may have an impact on risk were also systematically ranked. This, plus further qualitative evidence, supported our use of a decomposition of total risk into 'agency risk', 'business risk' and 'innovation risk'. These three risk classes displayed a ubiquitous capability for embracing most aspects of evidence that the field work produced.

    Original languageEnglish
    Title of host publicationPerformance Measurement and Management Control
    Publication statusPublished - 2002


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