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Why do European Venture Capital Companies syndicate?

Author

Listed:
  • Sophie Manigart

  • Andy Lockett
  • Miguel Meuleman

  • Mike Wright
  • Hans Landstrm
  • Hans Bruining
  • Philippe Desbrieres
  • Ulrich Hommel

    (Vlerick Leuven Gent Management School)

Abstract

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.

Suggested Citation

  • Sophie Manigart & Andy Lockett & Miguel Meuleman & Mike Wright & Hans Landstrm & Hans Bruining & Philippe Desbrieres & Ulrich Hommel, 2002. "Why do European Venture Capital Companies syndicate?," Vlerick Leuven Gent Management School Working Paper Series 2002-20, Vlerick Leuven Gent Management School.
    • Handle: RePEc:vlg:vlgwps:2002-20
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    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • M - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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