E‐commerce new venture performance: how funding impacts culture

New venture “startups” are financed via three standard methods: self‐funding, “friends and family” or possibly “angel” investors; seed capital from venture capitalists; and large corporations’ venture funds. Each of these financial structures has its own set of risk and reward trade‐offs. Corporate venture funding has been seen as the least risky funding method, but also the least likely to be available for the entrepreneur. Each of these funding methods is likely to engender a different kind of corporate culture that could impact the e‐commerce venture’s long‐term development. The self‐ or privately‐funded company must continuously scramble for scarce funds and may not be able to develop internally the necessary culture of knowledge creation. Companies supported primarily by venture capitalists may develop a culture that over‐focuses on quick return of capital to investors. Alternatively, the slow decision‐making processes of large corporations are often antithetical to Internet time.