The Design of Syndicates in Venture Capital
AbstractWe argue that the process whereby a venture capital syndicate is formed is characterized by two-sided asymmetric information, as the profitability signals held by different VCs are non-verifiable and manipulable. We analyze how an appropriate design of the syndicating VCs cash-flow rights can induce them to truthfully reveal their signals to each other. We then study how the incentive costs of syndication and the shape of financial claims vary with the VCs levels of expertise in evaluating entrepreneurial projects.
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Bibliographic InfoPaper provided by Fundacion BBVA / BBVA Foundation in its series Working Papers with number 201037.
Date of creation: Jun 2006
Date of revision:
Venture capital; syndication deals; asymmetric information.;
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- Da Rin, M. & Hellmann, T. & Puri, M.L., 2011.
"A Survey of Venture Capital Research,"
2011-044, Tilburg University, Tilburg Law and Economic Center.
- Da Rin, M. & Hellmann, T. & Puri, M.L., 2011. "A Survey of Venture Capital Research," Discussion Paper 2011-111, Tilburg University, Center for Economic Research.
- Marco Da Rin & Thomas F. Hellmann & Manju Puri, 2011. "A survey of venture capital research," NBER Working Papers 17523, National Bureau of Economic Research, Inc.
- Casamatta, Catherine & Haritchabalet, Carole, 2007.
"Experience, screening and syndication in venture capital investments,"
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Elsevier, vol. 16(3), pages 368-398, July.
- Casamatta, Catherine & Haritchabalet, Carole, 2007. "Experience, Screening and Syndication in Venture Capital Investments," IDEI Working Papers 443, Institut d'Économie Industrielle (IDEI), Toulouse.
- Casamatta, Catherine & Haritchabalet, Carole, 2007. "Dealing with Venture Capitalists: Shopping Around or Exclusive Negotiation," IDEI Working Papers 444, Institut d'Économie Industrielle (IDEI), Toulouse, revised Jul 2011.
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