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Venture capital syndication in times of economic crisis


  • Geertjan De Vries
  • Joern H. Block


This study analyses the effects of the 2000--2001 dot-com crisis and the 2008--2009 financial crisis on venture capital syndication. Using propensity score matching analysis, we show that during the two crises, venture capital firms (VCFs) had a lower tendency to syndicate their investments, and the size of the syndicates was smaller. This effect is found to be stronger for later-stage financing than for early stage financing. We explain the lower propensity to syndicate and the reduction in syndicate size by the existence of fewer exit opportunities for VCFs and a lower supply of funds for the venture capital industry. Implications for VCFs and start-up firms are discussed.

Suggested Citation

  • Geertjan De Vries & Joern H. Block, 2011. "Venture capital syndication in times of economic crisis," Venture Capital, Taylor & Francis Journals, vol. 13(3), pages 195-213, June.
  • Handle: RePEc:taf:veecee:v:13:y:2011:i:3:p:195-213
    DOI: 10.1080/13691066.2011.600278

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    References listed on IDEAS

    1. Joshua Lerner, 2002. "Boom and bust in the venture capital industry and the impact on innovation," Economic Review, Federal Reserve Bank of Atlanta, issue Q4, pages 25-39.
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