This article examines the sensitivity of employment to sales contractions in a negative growth scenario for high-tech entrepreneurial ventures. Using the lens of transaction cost economics, we move from the centrality of human capital for these firms to theoretically discuss and empirically test the moderating effect of venture capital financing on the employment-sales relationship. In doing so, we take into account (i) the identity of the investor, distinguishing independent, corporate and governmental venture capital investors, and (ii) the presence and composition of a syndicate. Copyright © 2013 John Wiley & Sons, Ltd.