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Does Venture Capital Syndication Spur Employment Growth and Shareholder Value? Evidence from German IPO Data

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  • Erik Lehmann

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Abstract

This study empirically examines the syndication of equity by multiple venture capitalists in Germany. Following the literature, there are mainly two competing views as to why venture capitalists syndicate investments. First, syndication can be viewed as a means of risk-sharing. Second, venture capitalists may provide important productive resources to firms: capital and information. I test hypotheses based on these two aspects. The results show that the syndication of equity and the number of venture capitalists involved cannot be fully explained by firm characteristics like size, age, or industry affiliation. Although syndicated investments do not differ significantly in stock-market performance, they do show significantly higher growth rates. Copyright Springer 2006

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Bibliographic Info

Article provided by Springer in its journal Small Business Economics.

Volume (Year): 26 (2006)
Issue (Month): 5 (06)
Pages: 455-464

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Handle: RePEc:kap:sbusec:v:26:y:2006:i:5:p:455-464

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Web page: http://www.springerlink.com/link.asp?id=100338

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Keywords: Firm Performance; Human Capital; Syndication; Venture Capital;

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Cited by:
  1. Younghoon Kim & Yeonbae Kim & Jeong-Dong Lee, 2009. "Corporate Venture Capital and Its Contribution to Intermediate-Goods Firms in South Korea," TEMEP Discussion Papers 200918, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Oct 2009.
  2. Haizhi Wang & Robert Wuebker & Shu Han & Michael Ensley, 2012. "Strategic alliances by venture capital backed firms: an empirical examination," Small Business Economics, Springer, vol. 38(2), pages 179-196, February.

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