Venture Capital Financing in a Crisis Economy: Entrepreneurial Risk, Venture Creation, and Perceived Firm Financial Performance

Financial crises severely constrain entrepreneurs’ access to traditional financing, increasing the need for alternative funding mechanisms. Venture capital (VC) represents one such financing alternative and may also provide strategic and managerial support. However, evidence concerning how entrepreneurs perceive VC financing in crisis-affected economies remains limited. This study examines the associations between perceptions of equity-based VC financing, entrepreneurs’ willingness to launch new ventures, and perceived firm financial performance while assessing the moderating roles of risk aversion and perceived VC coaching and mentoring. This study draws on cross-sectional survey data from 392 Lebanese entrepreneurs and entrepreneurially oriented individuals. The findings indicate that perceptions of equity-based VC financing are positively associated with entrepreneurs’ willingness to launch new ventures, with this association becoming stronger at higher levels of respondent risk aversion. Perceptions of equity-based VC financing are also positively associated with perceived firm financial performance, with this association being stronger at higher levels of perceived VC coaching and mentoring. These findings represent perception-based associations and should not be interpreted as evidence of causal effects, temporal progression, or objectively measured financial performance.