Is the world of venture capital investors turning flat? Perspectives of radical strategic changes in high-technology new venture

High-technology new ventures (HTNVs) usually operate in a dynamic environment, with high levels of uncertainty; therefore they often require radical changes in strategy. The perspective of venture capital investors (VCs)---the main source of funding for HTNVs---towards radical changes in strategy (RSC) is therefore crucial to the understanding causes of radical strategic change in these new ventures. This paper examines the effect of cultural differences on the approach of VCs to RSC. A mixed-method methodology of semi-structured interviews was employed to compare Israeli with non-Israeli investor groups. Most of the investors agreed that radical strategic changes are likely to occur in new ventures, but they did not consider them to be favourable events. While previous research suggested that cultural differences should be expected, our findings surprisingly indicated limited cross-cultural differences among the VCs. Unlike the non-Israeli investors, the Israeli investors deemed RSC events to be influenced significantly more by internal causes than by external ones. Based on the findings, we conclude that VCs from different developed countries share fairly similar views of RSC in HTNVs. A possible explanation of this lack of difference might be the comparatively small VC community and globalization of the high-technology venture markets.