Nature and evolution of trust in business-to-business settings: Insights from VC-entrepreneur relationships

Department

Marketing and Professional Sales

Document Type

Article

Publication Date

11-1-2020

Abstract

© 2020 While the importance of trust in B2B relationships has been well established, research is yet to investigate its processual nature. This study investigates the VC-Entrepreneur relationship – a special B2B relationship to outline the nature and evolution of trust across a venture's life cycle. Results suggest that early-stage relationships are characterized by asymmetric trust, which declines with time and impacts cooperation between both sides, access to funding and business networks, contract enforcement, feedback, mentorship, and knowledge sharing. Late-stage VC- Entrepreneur relationships suffer from symmetric distrust, which increases with time, resulting in an overt emphasis on contracts, syndicated investments, disagreements during decision making, and pressure to exit. This study extends B2B trust literature by offering a relationship-phase-contingent view of trust across a venture's life cycle, outlining specific contexts that question the reciprocal and symmetric assumption of trust in dyadic relationships. It highlights how the interplay among power, opportunism, and weak institutional environment dictate dyadic trust. And finally, the paper outlines three testable propositions on trust in VC- Entrepreneur relationships that can be extended to other emerging economies.

Journal Title

Industrial Marketing Management

Journal ISSN

00198501

Volume

91

First Page

246

Last Page

256

Digital Object Identifier (DOI)

10.1016/j.indmarman.2020.09.011

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