Will the Involvement of Venture Capital Affect Entrepreneurial Firms’ Business Model?

Business model is very important to the development of an enterprise, because it is not only an important condition for the development of an enterprise, but also an important source of competitive advantages. However, if an enterprise wants to build a successful business model, it not only is closely related to the internal resource base and core competence of the enterprise, but also depends on the resource support of various stakeholders. For entrepreneurial firms, venture capital is an extremely important stakeholder, which can help entrepreneurial firms to create and obtain value through their own industry expertise and network resources; therefore, it plays an important role in promoting the construction and evolution of the business model of entrepreneurial firms. However, there are currently few studies on how venture capital, which is an important external stakeholder of an enterprise, is “embedded” into the inside of the start-up enterprise from the outside, thereby affecting its business model. In view of this, based on the resource-based view and the agency theory, this paper analyzes the internal mechanism of the impact of venture capital on the business model of entrepreneurial firms, builds a theoretical analysis framework for the relationship between venture capital and the business model of entrepreneurial firms on this basis, and then puts forward relevant research hypotheses. Based on the data of 677 companies listed on the SME and GEM in China from 2004 to 2017, this paper empirically examines the impact of venture capital on the business model of entrepreneurial firms and the moderating mechanism of the competitive environment. Results indicate that venture capital will not only promote the innovation orientation of enterprises’ business model, but also strengthen the efficiency orientation of enterprises’ business model. Besides, government-backed venture capital will promote the innovation orientation of enterprises’ business model, while non-government-backed venture capital will promote the efficiency of enterprises’ business model. In addition, the competitive environment positively moderates the relationship between the involvement of the non-government-backed venture capital and the efficiency orientation of enterprises’ business model. This study not only extends the existing research on business model and venture capital, but also provides important implications for venture capital investment guiding and entrepreneurial practice.