What drives venture capital syndication?

Hopp, Christian; Rieder, Finn (2011). What drives venture capital syndication? Applied Economics, 43(23), pp. 3089-3102. Taylor & Francis 10.1080/00036840903427257

Text What drives venture capital syndication.pdf - Published Version Restricted to registered users only Available under License Publisher holds Copyright. Download (253kB) | Request a copy

Using a sample of 1485 funded firms in Germany, we analyse the drivingforces of Venture Capitalist (VC) syndication and try to disentangle thecircumstances under which VCs engage in collaboration with partners. Theresults indicate that syndication is more pronounced for younger fundedfirms. For firms where products are far from commercialization, the risksthat investors face are more severe. With respect to disentangling the roleof diversification and managerial resource motives we analyse the impactof syndication activities on the industry concentration in VC portfolios.The results indicate that (all else equal) more syndication leads to morepronounced concentration on certain industries. These findings are in linewith the argument that VCs involve partners to leverage upon theiridiosyncratic skills and knowledge to either improve deal selection and/orprovide a better quality of managerial advice to the funded firm ratherthan simply using syndication to diversify portfolios.

Item Type:	Journal Article (Original Article)
Division/Institute:	Business School > Business Foundations and Methods
Name:	Hopp, Christian0000-0002-4095-092X and Rieder, Finn
ISSN:	0003-6846
Publisher:	Taylor & Francis
Language:	English
Submitter:	Christian Hopp
Date Deposited:	21 Oct 2020 10:26
Last Modified:	26 Sep 2021 02:18
Publisher DOI:	10.1080/00036840903427257
ARBOR DOI:	10.24451/arbor.12008
URI:	https://arbor.bfh.ch/id/eprint/12008