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Why do European venture capital companies syndicate?
Manigart, Sophie Lockett, Andy Meuleman, Miguel Wright, Mike Landström, Hans Bruining, Hans Desbrières, Philippe Hommel, Ulrich
Manigart, Sophie
Lockett, Andy
Meuleman, Miguel
Wright, Mike
Landström, Hans
Bruining, Hans
Desbrières, Philippe
Hommel, Ulrich
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Publication Type
Working paper
Editor
Supervisor
Publication Year
2002
Journal
Book
Publication Volume
Publication Issue
20
Publication Begin page
Publication End page
Publication Number of pages
38
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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.
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Keywords
Corporate Finance, Entrepreneurship