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The syndication of venture capital investments

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  • Lockett, Andy
  • Wright, Mike

Abstract

This paper examines competing finance, resource-based and deal flow explanations for the syndication of venture capital investments. Evidence from 60 firms (a 58.8% response rate) is analysed. Overall the finance perspective provides a strong explanation of motives for syndication, but the resource-based view is found to be much more important for those firms involved in at least some early stage transactions. The implications for researchers are that venture capital firms should not be treated as a homogeneous group and that the investment stages in which they operate may strongly influence attitudes towards syndication. In addition, there are implications for practitioners as venture capital firms may not be attributing sufficient attention to the need to augment their own resource base in order to enable them to make superior decisions when selecting deals and managing investments.

Suggested Citation

  • Lockett, Andy & Wright, Mike, 2001. "The syndication of venture capital investments," Omega, Elsevier, vol. 29(5), pages 375-390, October.
  • Handle: RePEc:eee:jomega:v:29:y:2001:i:5:p:375-390
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    References listed on IDEAS

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    1. Ruhnka, John C. & Young, John E., 1991. "Some hypotheses about risk in venture capital investing," Journal of Business Venturing, Elsevier, vol. 6(2), pages 115-133, March.
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    13. Gordon Murray, 1999. "Early-stage venture capital funds, scale economies and public support," Venture Capital, Taylor & Francis Journals, vol. 1(4), pages 351-384, October.
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