Why Do Venture Capital Companies Syndicate?
Financial theory, access to deal flow, selection and monitoring skills are used to explain syndication in venture capital (VC) firms in six European countries. In contrast with US findings, portfolio management motives are more important for syndication than individual deal management motives. Risk sharing, portfolio diversification and access to larger deals are more important than selection and monitoring of deals. This holds for later stage and for early stage investors. Value adding is a stronger motive for syndication for early stage investors than for later stage investors, however. Non-lead investors join syndicates for the selection and value adding skills of the syndicate partners.
|Date of creation:||Feb 2004|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: ++ 32 (0) 9 264 34 61
Fax: ++ 32 (0) 9 264 35 92
Web page: http://www.ugent.be/eb
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Joshua Lerner, 1994. "The Syndication of Venture Capital Investments," Financial Management, Financial Management Association, vol. 23(3), Fall.
- Bygrave, William D., 1987. "Syndicated investments by venture capital firms: A networking perspective," Journal of Business Venturing, Elsevier, vol. 2(2), pages 139-154.
- Black, Bernard S. & Gilson, Ronald J., 1998. "Venture capital and the structure of capital markets: banks versus stock markets," Journal of Financial Economics, Elsevier, vol. 47(3), pages 243-277, March.
- Jeng, Leslie A. & Wells, Philippe C., 2000. "The determinants of venture capital funding: evidence across countries," Journal of Corporate Finance, Elsevier, vol. 6(3), pages 241-289, September.
- Bruining, J. & Wright, D.M., 2002.
"Entrepreneurial Orientation In Management Buy-Outs And The Contribution Of Venture Capital,"
ERIM Report Series Research in Management
ERS-2002-67-ORG, 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 University Rotterdam.
- Hans Bruining & Mike Wright, 2002. "Entrepreneurial orientation in management buy-outs and the contribution of venture capital," Venture Capital, Taylor & Francis Journals, vol. 4(2), pages 147-168, April.
- Raaj Kumar Sah & Joseph E. Stiglitz, 1984.
"The Architecture of Economic Systems: Hierarchies and Polyarchies,"
NBER Working Papers
1334, National Bureau of Economic Research, Inc.
- Sah, Raaj Kumar & Stiglitz, Joseph E, 1986. "The Architecture of Economic Systems: Hierarchies and Polyarchies," American Economic Review, American Economic Association, vol. 76(4), pages 716-27, September.
- Mayer, Colin & Schoors, Koen & Yafeh, Yishay, 2002.
"Sources of Funds and Investment Activities of Venture Capital Funds: Evidence from Germany, Israel, Japan and the UK,"
CEPR Discussion Papers
3340, C.E.P.R. Discussion Papers.
- Colin Mayer & Koen Schoors & Yishay Yafeh, 2003. "Sources of Funds and Investment Activities of Venture Capital Funds: Evidence from Germany, Israel, Japan and the UK," NBER Working Papers 9645, National Bureau of Economic Research, Inc.
- Mike Wright, 1998. "Venture Capital and Private Equity: A Review and Synthesis," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 25(5&6), pages 521-570.
- James A. Brander & Raphael Amit & Werner Antweiler, 2002. "Venture-Capital Syndication: Improved Venture Selection vs. The Value-Added Hypothesis," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 11(3), pages 423-452, 09.
- Steven N. Kaplan & Frederic Martel & Per Stromberg, 2003.
"How Do Legal Differences and Learning Affect Financial Contracts?,"
NBER Working Papers
10097, National Bureau of Economic Research, Inc.
- Kaplan, Steven N. & Martel, Frederic & Strömberg, Per, 2004. "How Do Legal Differences and Learning Affect Financial Contracts?," SIFR Research Report Series 28, Institute for Financial Research.
- Kaplan, Steven & Martel, Frederic & Strömberg, Per Johan, 2003. "How Do Legal Differences and Learning Affect Financial Contracts?," CEPR Discussion Papers 4161, C.E.P.R. Discussion Papers.
- Cumming, Douglas J. & MacIntosh, Jeffrey G., 2001. "Venture capital investment duration in Canada and the United States," Journal of Multinational Financial Management, Elsevier, vol. 11(4-5), pages 445-463, December.
- Allen N. Berger & Gregory F. Udell, 1998.
"The economics of small business finance: the roles of private equity and debt markets in the financial growth cycle,"
Finance and Economics Discussion Series
1998-15, Board of Governors of the Federal Reserve System (U.S.).
- N. Berger, Allen & F. Udell, Gregory, 1998. "The economics of small business finance: The roles of private equity and debt markets in the financial growth cycle," Journal of Banking & Finance, Elsevier, vol. 22(6-8), pages 613-673, August.
- Philippe Desbrières & Sophie Manigart & Koen De Waele & Mike Wright & Ken Robbie & Harry Sapienza & Amy Beekman, 2002.
"Determinants of required return in venture capital investments:A five country study,"
Working Papers CREGO
1020701, Université de Bourgogne - CREGO EA7317 Centre de recherches en gestion des organisations.
- Manigart, Sophie & De Waele, Koen & Wright, Mike & Robbie, Ken & Desbrieres, Philippe & Sapienza, Harry J. & Beekman, Amy, 2002. "Determinants of required return in venture capital investments: a five-country study," Journal of Business Venturing, Elsevier, vol. 17(4), pages 291-312, July.
- Sapienza, Harry J., 1992. "When do venture capitalists add value?," Journal of Business Venturing, Elsevier, vol. 7(1), pages 9-27, January.
- Lockett, Andy & Wright, Mike, 2001. "The syndication of venture capital investments," Omega, Elsevier, vol. 29(5), pages 375-390, October.
- Gorman, Michael & Sahlman, William A., 1989. "What do venture capitalists do?," Journal of Business Venturing, Elsevier, vol. 4(4), pages 231-248, July.
- Sapienza, Harry J. & Manigart, Sophie & Vermeir, Wim, 1996. "Venture capitalist governance and value added in four countries," Journal of Business Venturing, Elsevier, vol. 11(6), pages 439-469, November.
- Douglas J. Cumming, 2006. "The Determinants of Venture Capital Portfolio Size: Empirical Evidence," The Journal of Business, University of Chicago Press, vol. 79(3), pages 1083-1126, May.
- Admati, Anat R & Pfleiderer, Paul, 1994. " Robust Financial Contracting and the Role of Venture Capitalists," Journal of Finance, American Finance Association, vol. 49(2), pages 371-402, June.
When requesting a correction, please mention this item's handle: RePEc:rug:rugwps:04/226. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Nathalie Verhaeghe)
If references are entirely missing, you can add them using this form.