Integrating Organizational Culture in the VC Evaluation Process

Abstract: Assessing the team is an essential part of the evaluation process conducted by venture capitalists before an investment opportunity. In turn, the team is completely influenced by its organizational culture. Therefore in this study, I investigate how organizational culture can become an integral part of the VC evaluation process to improve this pro-cedure. This is done by exploring how the culture assessment is performed and what culture factors that are considered important. For this purpose, semi-structured in-terviews have been conducted with seven investment managers from five different VC firms. My findings indicate that the investors lack a structured methodology to assess culture. The assessment is mainly focused on the founders and management team, and performed through interactions with their network, personality tests and discussions. Except from the founders and management team, the investors also highlights the im-portance of assessing the degree of teamwork and consensus, diversity and inclusion, receptivity and adaptability, talent attraction ability, employee turnover, defined and shared responsibility and focus within the venture. Ultimately, this thesis suggests an assessment framework regarding organizational culture for venture capitalists.