The Influence of Investors on Stress – a Blessing or a Curse for New Venture Teams? A Qualitative Study of Private Equity Investors’ Influence on Stress Experienced in New Venture Teams

Sammanfattning: Entrepreneurs often face high levels of stress (Boyd & Gumpert, 1983; Shepherd, Marchisio, Morrish, Deacon & Miles, 2010) and stress has been found to affect a team’s performance (Driskell, Salas & Johnston, 1999). At the same time, private equity investors are a common source to gain external funding, while being known for their value-added roles as well as potential risks (De Clercq, Vance, Lehtonen & Sapienza, 2006; Politis, 2016). Building on those findings, the purpose of this study is to identify how private equity investors influence stress perceived in a new venture team (NVT). This qualitative study examined four Swedish ventures who received equity investment. Semi-structured interviews with the CEO’s and other NVT-members allowed for an in-depth understanding of the complex interdependencies and processes of investors’ negative influence on stressors, their positive influence on coping with stress and its effect on an NVT. First, the study found that NVTs perceived an increased level of stress due to investors and the investment itself. Second, an investor’s problem- as well as emotion-focussed contribution to coping with stress has been observed. Thereby, only the leader benefitted from both contributions directly, as he/she is often the single point of contact for investors. Lastly, the importance of contextual factors such as leadership as a moderator of investor-caused stress has been found. This study reveals the positive and negative influences of an investor’s involvement, as well as the importance of strong leadership and, is, therefore, of relevance for entrepreneurs, leaders, NVTs and investors. Prior entrepreneurial finance studies have mainly focused on investor-related conflict and added value, disregarding stress. Moreover, entrepreneurial stress literature is lacking the investor as a specific endogenous stressor and does not focus on the team context. Therefore, this paper adds to entrepreneurial finance as well as entrepreneurial stress literature.