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Optimal Syndication Decision of Corporate Venture Capital and Venture Capital Firms

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  • Frick, Andreas
  • Maxin, Hannes

Abstract

Venture capital and corporate venture capital firms are driven by high financial returns through the sale of ownership stakes. Additionally, corporate venture capital firms maximize the profits of their parent companies by generating innovation advantage. Despite this, both intermediaries can join syndicates to obtain more information about their potential investments. We examine a model to show the differences between the syndication decisions of these two investor types. We find that corporate venture capital firms finance more projects without a syndicate in comparison with venture capital firms. To reinforce our theoretical results, we conduct a survey about the German private equity market. The empirical evidence support our main theoretical findings.

Suggested Citation

  • Frick, Andreas & Maxin, Hannes, 2016. "Optimal Syndication Decision of Corporate Venture Capital and Venture Capital Firms," Hannover Economic Papers (HEP) dp-577, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    • Handle: RePEc:han:dpaper:dp-577
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    File URL: http://diskussionspapiere.wiwi.uni-hannover.de/pdf_bib/dp-577.pdf
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    Cited by:

    1. Hannes Maxin, 2018. "Corporate Venture Capital im Bankensektor: Eine Fallstudie," ZfKE – Zeitschrift für KMU und Entrepreneurship, Duncker & Humblot, Berlin, vol. 66(2), pages 71-89.

    More about this item

    Keywords

    Corporate venture capital; Venture capital; Syndication; Screening;
    All these keywords.

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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