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The dynamic ownership arrangements surrounding the venture capitalist–entrepreneur (VC-E) relationship inherent in new ventures make the examination of principals’ or venture capitalists’ (VCs) and agents’ (entrepreneurs) governance arrangements interesting to explore. This article examines the limitations of agency theory and then stewardship theory in explaining the behaviors of individuals in the VC-E relationship. Our analysis points out the potential problems inherent in each theory's explanatory ability as it relates to the VC-E relationship. Lastly, theoretical gaps in the VC-E relationship are discussed along with suggestions for new theory surrounding this important and intriguing relationship.