Abstract
Employing a dynamic view of the resource dependence perspective (RDP), we examine how changing resource needs of new ventures will drive lead venture capitalists (VCs) to reach other partners for heterogeneous resources. A greater number of partners will increase the group resource heterogeneity, but they will also dilute lead VCs’ power over other partners and increase coordination costs in managing the group. Hence, we argue that the formation of a multiparty coalition is navigated by changing resource needs and leaders’ power constraints concern. We test our hypotheses by examing how lead venture captial (VC) investors compose their syndicates along different ventures’ life stages.
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