Financial theory, resource-based theory and access to deal flow are used to explain syndication practices among European venture capital (VC) firms. The desire to share risk and increase portfolio diversification is a more important motive for syndication than the desire to access additional intangible resources or deal flow. Access to resources is, however, more important for non-lead than for lead investors. When resource-based motives are more important, the propensity to syndicate increases. Syndication intensity is higher for young VC firms and for VC firms, specialised in a specific investment stage. Finally, syndication strategies are similar across European countries, but differ from North American strategies.
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Paper provided by EconWPA in its series Finance with number
0210006.
Length: 38 pages Date of creation: 22 Oct 2002 Date of revision: Handle: RePEc:wpa:wuwpfi:0210006
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Paper
Manigart, S. & Bruining, J. & Lockett, A. & Meuleman, M., 2002.
"Why Do European Venture Capital Companies Syndicate?,"
Research Paper
ERS-2002-98-ORG Revision_, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni.
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