Venture Capital Team, Competitive Landscape, and Creating an Effective Business Model
- Miguel Virgen, PhD Student in Business
- Nov 23, 2025
- 8 min read
Updated: Jan 25
The involvement of venture capital institutions (VCs) in the development of startups is crucial for the growth and success of startups. In addition to providing critical financial support to their investee startups, VCs actively play a professional role in helping these companies establish closer ties with various parties including upstream and downstream business partners and consumers (Fu, H. et al., 2024). When it comes to reviewing the venture capital team from a doctoral perspective, it can be important to make sure that we analyze both the individual competencies and the collective dynamics that drive investment decisions within a venture capital team. VCs should closely monitor the evolution and progression of their organization networks over time. They should tailor their collaboration timelines to align with their specific performance objectives (Buchner, A. et al., 2025). A venture capital team can be made up of partners, associates, analysts, and advisors. Partners can be industry experts with plenty of business acumen that are in charge of the ventures strategy and performance. Associates and analysts usually work on conducting market research and financial modeling. Although venture capital teams make up a venture firm, not all team members are involved in the investing decisions of the firms, but they all play a crucial role in assisting and guiding in the decision making process and the annual performance of the firm.
From a Ph.D. student’s perspective, one can model the decision making process of a venture capital team where there are multiple functional areas that all take place before a final decision is made. For example, the anchoring bias may result in early stage valuations to skew toward the founders’ optimistic projections, while confirmation bias can result in the team to overweight data that supports a preferred narrative. In order to reduce these risks, there would need to be an establish formal investment committee, deployed structured scoring frameworks, and a culture of constructive dissent. Hence, the cohesion and adaptive learning capacity of the venture capital team would prove to be essential in navigating the complexities of early stage investing.
Competitive Landscape
As intra-industry rivalry intensifies globally and market change accelerates, firms are more concerned about long-term survival issues than short-term fnancial performance. To survive longer and prosper, firms often battle with one another through competitive action repertoires, defined as a series of “externally directed, specific competitive moves initiated by a firm to enhance its relative competitive position (Cho, J., 2024). In today's global market, there are now an increase of threats of new entrants, bargaining power of suppliers and customers, and the availability of product or service substitutes. All these elements can all shape industry profitability and entry barriers. It also becomes essential for startups to conduct proper market analysis in order to gain insight on what the competitive landscape looks like for their specific industry. Hence, understanding who the competitors are, the total market share available, and possible key suppliers that will affect the competitive edge of ones startup.
With the internet connecting the world and allowing businesses to enter international markets by simply setting up a website, it become even more essential for entrepreneurs to learn about the fast technological changes and regulatory shifts that are occurring in the modern world. For example, in the social media industry, changes in data privacy laws can change the competitive dynamics within a week. Hence, startup ventures should create and implement strategies that balance exploitation of current advantages with exploration of upcoming opportunities. In this way, a well crafted competitive analysis allows for pathway for maintaining a competitive advantage in the market.
Business Model
The business model can be considered as on of the key elements of any venture’s strategy. The business model canvas elements are compromised of customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partnerships, and cost structure. Research has shown that business model innovation is a key leverage for performance Therefore, the questions are: To what extent are companies experimenting with new ways to design their business models? And do companies make full use of the business model innovation space available to them or do they tend to adopt business models with similar features? (Montemari, M. et al., 2022). Business models can be seen as assumptions that need to be confirmed in the real world , as well as a map or guide to stay on track on where the founder plans to take the business. Lean Startup methods, are typically used for fast prototyping of value propositions and pricing with minimum viable products (MVPs). Data such as customer acquisition cost (CAC), and lifetime value (LTV) can be viewed as valuable feedback that can guide business changes and adaptability. Using such data to make changes can be essential because for a business model to remain effective it needs to be a living document that gets updated regularly in order to reflect changing market preferences, competitive pressures, and technological advancements. In short, the business model’s life cycle from ideation through validation to scaling becomes valuable for both academic work and business innovation. Today’s key challenge for firm growth relies in the integration of digital technologies and their use in new business models. Thus, firms increasingly engage in a digital transformation and in digitalizing their business model. Firms can apply digital technologies for improved or novel internal and external processes and integrate them in new business models (Bouncken, R. et al., 2021). By approaching the venture capital team, competitive landscape, and business model through a rigorous, multidisciplinary lens, both founders and students can make the decision processes a lot more clear in order to properly communicate business ideas that can become successful ventures. This academic framing not only deepens our theoretical understanding but also provides actionable insights for practitioners seeking to translate investment capital into sustainable enterprise value.
References:
Fu, H., Qi, H., & An, Y. (2024). When do venture capital and startups team up? Matching matters. Pacific-Basin Finance Journal., 85. https://doi.org/10.1016/j.pacfin.2024.102361
Buchner, A., Helbing, P., Mohamed, A., & Yoon, H. D. (2025). Does the same investment team create value? Evidence from venture capital syndication. Small Business Economics. https://doi.org/10.1007/s11187-025-01058-7
Cho, J. (2024). Thriving in the global competitive landscape: competitive dynamics and longevity of emerging market firms. Asian Business & Management, 23(1), 82-109. https://doi.org/10.1057/s41291-023-00250-5
Montemari, M., Taran, Y., Schaper, S., Nielsen, C., Thomsen, P., & Sort, J. (2022). Business model innovation or Business model imitation – That is the question. Technology Analysis & Strategic Management, 36(3), 393–407. https://doi.org/10.1080/09537325.2022.2034780
Bouncken, R. B., Kraus, S., & Roig-Tierno Norat. (2021). Knowledge- and innovation-based business models for future growth: digitalized business models and portfolio considerations. Review of Managerial Science, 15(1), 1-14. https://doi.org/10.1007/s11846-019-00366-z
-Miguel Virgen, PhD Student
-------------------------------
Further Response and Discussions:
Virgen (2025) discusses the venture capital (VC) investment team structure and individual roles, highlighting the importance of cohesion, adaptability, and potential analysis biases in an ever-changing competitive landscape. The startup’s business model components, including the business model canvas and lean startup methodologies, digital technologies, and customer data, are presented as elements and tools for communicating ideas, creating actionable itineraries, and translating investments into successful ventures.
However, while discussing the VC team’s competencies and strategies is important, especially to the startup, Vernon (2020) stresses that the founding team is the focus of the VC's due diligence and proposes that VC analyze the founding team as much, if not more, than the business itself, focusing on team makeup, characteristics, and skills to reduce investment risk. Risk is reduced when the founding team has experience starting a company, fundraising, scaling, and successfully exiting. Risk is also reduced when there is an experienced founder with an inexperienced team, when the team is experienced but unsuccessful, and when the team has industry-specific experience and knowledge. VCs further look to reduce risk through key attributes of the founding team, including a customer-centric attitude, skin in the game (are they financially invested and committed), and the potential for a lasting relationship. Founding team characteristics such as confidence (Leo et al., 2023), optimism and grit (Wang, 2022), passion (Maryami et al., 2023; Santos & Cardon, 2019), emotional intelligence (Allen et al., 2021), coachability (Kuratko et al., 2021), and collegiality (Vernon, 2020) positively impact startup performance, success, and represent traits that VCs look for.
Conclusions
The importance of the VC team cannot be understated; however, VCs look for certain elements of the founding team as key determinants of investment worthiness. These include technical skills, startup experience, industry knowledge, attitude, emotional maturity, passion, and other leadership skills. The VC-founder relationship will undergo stress tests beyond due diligence and the initial funding stage, and a successful exit will hinge on the strength of that relationship as much as the validity of the business model and ability to stave off competition. Founding teams that score high on all due diligence measures reduce investor risk and extend the best opportunity for a successful VC relationship and exit.
References
Allen, J. S., Stevenson, R. M., O'Boyle, E. H., & Seibert, S. (2021). What matters more for entrepreneurship success? A meta‐analysis comparing general mental ability and emotional intelligence in entrepreneurial settings. Strategic Entrepreneurship Journal, 15(3), 352-376. https://doi.org/10.1002/sej.1377
Kuratko, D. F., Neubert, E., & Marvel, M. R. (2021). Insights on the mentorship and coachability of entrepreneurs. Business Horizons, 64(2), 199-209. https://doi.org/10.1016/j.bushor.2020.11.001
Leo, F. M., Filho, E., López-Gajardo, M. A., García-Calvo, T., & González-Ponce, I. (2023). The relationship among intra-group communication, transactive memory systems, collective efficacy and team performance: A structural equation model analysis with elite footballers. European Journal of Sport Science, 23(4), 599-606. https://doi.org/10.1080/17461391.2022.2049373
Maryami, S., Loi, M., Martinez, M., & Di Guardo, M. C. (2023). On the role of team passion in inventing, founding and developing: What happens in the early stages of entrepreneurship? Journal of Small Business and Enterprise Development, 30(4), 692-713. https://doi.org/10.1108/JSBED-07-2022-0302
Santos, S. C., & Cardon, M. S. (2019). What’s love got to do with it? Team entrepreneurial passion and performance in new venture teams. Entrepreneurship Theory and Practice, 43(3), 475-504. https://doi.org/10.1177/1042258718812185
Vernon, P. (2020). Venture capital strategy: How to think like a venture capitalist. (2nd ed.). VC Razor Publishing.
Virgen, M. (2025). Venture capital team, competitive landscape, business model. In Dr. Jeffrey Hicks, BUSI-709, Summer D 2025, Raising Capital for Business Startups. Liberty University.
Wang, S. (2022, December). Founder evaluation from VCs’ perspective: Emphasizing grit and moderate optimism and gauging them scientifically. 2022 International Conference on Economics, Smart Finance and Contemporary Trade (ESFCT 2022). Atlantis Press. https://doi.org/10.2991/978-94-6463-052-7_132
-Douglas Milbauer, PhD Student
---------------------------------------
Miguel, thank you for that extensive and eye-opening discussion. The venture capital team, into all its moving parts and tied to cognitive biases with investment, was very informative. Spotting biases like anchoring and confirmation bias is super crucial. A study by Sachs & Unbescheiden (2024) recently highlighted how early-stage investors often trip over these biases, which can lead to them misjudging startups, particularly when the founders have that charm. This just goes to show how spot-on you are about the need for structured scoring systems and formal committees.
The global pace of change is persistent, and there's always a push to both defend and innovate. I'd toss in that startups can change their strategic game by developing what (Arthurs & Busenitz, 2005) called dynamic capabilities—those internal processes that let them adapt faster than their competitors. These capabilities are key in industries where regulations, tech, or customer needs are constantly shifting.
Treating the business model like a living document was a great insight. It's not enough to just craft a solid framework and then forget about it. Constant tweaking, especially with Lean principles and real-time metrics like LTV: CAC, is what enables a model to really take off. Thank you for combining academic expertise with useful know-how. This post brought together how strategy, psychology, and execution all go together in the world of venture capital.
References
Arthurs, J. D., & Busenitz, L. W. (2005). Dynamic capabilities and venture performance: The effects of venture capitalists. Journal of Business Venturing, 21(2), 195–215. https://doi.org/10.1016/j.jbusvent.2005.04.004
Sachs, M., & Unbescheiden, M. (2024). Biases Influencing Venture Capitalists’ Decision-making: a Systematic Literature Review. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.4818073
-Ashli Sacramento, PhD Student
------------------------------------
Publisher Note
Miguel Virgen, PhD Student. I have no known conflict of interest to disclose.
Correspondence concerning this article should be addressed to
Miguel Virgen, Email: support@doctorsinbusinessjournal.com
