This article explores the divergent interests and goals that have led to inherent conflicts in the dyadic relationship between entrepreneurs and venture capitalists (VCs). Whereas prior research has relied mostly on the perspective of VCs in minimizing such conflicts, we propose that an entrepreneur's psychological capital (as opposed to economic, human and social capital) can help shed light on how they manage conflicts in their relationships with VCs. Drawing from the literature on psychologicalcapital, we use inductive research to construct a set of theoretical propositions relating to strategic responses to resolving conflicts with VCs based on a sample of entrepreneurs in high-tech start-up firms in China.