Abstract: Although venture capital firms fill a much needed funding gap by financing growing companies, a review of the detailed operations of venture capital reveals that, through hands-on involvement, venture capital firms provide more than finance to their portfolio companies. Over the years, researchers have attempted to measure venture capital firms’ involvement, termed value-added, in their portfolio companies. The results have largely remained inconclusive as to the value-added potentials of venture capitalists. The problem was further complicated by the findings that venture capital firms who are more involved in their portfolio companies, do not necessarily perform better themselves nor do their portfolio companies. Most of the research on value added has confined itself to an application of agency theory in explaining venture capital firms/portfolio companies’ relations. It is argued that the value added by venture capital firms, in portfolio companies, is a function of resource transfer resulting from network-dyad relationship. Three elements of network relationship i.e. consent, capacity and compatibility are explored and their impact on value added relationship determined. It was found that willingness of the venture capital firms to be involved in the affairs of a portfolio company is less important than their capacity to add value.