Value Cognition of New Technology-Based Firms

In understanding the value cognition process and divergence between Chinese venture capitalists ("VC") and techno-entrepreneurs ("TE"), we classify the numerous value cognitive criteria into two types, Resource and Performance, and construct a new dependent variable "Importance of resource over performance ("IROP)" to explore the value cognition gap between Chinese VCs and TEs. Based on a survey data of 33 TEs and 27 VCs collected in China in 2007, we show that the perceived relative importance of Resource over Performance decreases along the NTBF\´s development stage, with both VCs and TEs allocating higher weight on Performance over Resource indicators as the NTBF grows. Furthermore, we find the gap in the perceived IROP between VCs and TEs is significant in the middle and late stages; however such difference is not significant in early stages. Our findings have implications on both the techno-entrepreneurship literature and the venture capital financing practices.