Syndication Strategies in Venture Capital Networks

David Mas (), Annick Vignes () and Gérard Weisbuch ()
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David Mas: ERMES - Equipe de recherche sur les marches, l'emploi et la simulation - UP2 - Université Panthéon-Assas - CNRS - Centre National de la Recherche Scientifique
Annick Vignes: ERMES - Equipe de recherche sur les marches, l'emploi et la simulation - UP2 - Université Panthéon-Assas - CNRS - Centre National de la Recherche Scientifique
Gérard Weisbuch: LPS - Laboratoire de Physique Statistique de l'ENS - FRDPENS - Fédération de recherche du Département de physique de l'Ecole Normale Supérieure - ENS Paris - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique - UPMC - Université Pierre et Marie Curie - Paris 6 - UPD7 - Université Paris Diderot - Paris 7 - CNRS - Centre National de la Recherche Scientifique

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Abstract: Empirical evidence shows that venture capitalists syndicate to finance start-ups. This paper focuses on the role of the social network generated by these syndication operations. We consider the links developed between venture capitalists, through co-investment rounds, and we study their relationships both through network and econometric analyses. We first demonstrate that the syndication network is not random. Secondly, we show that the different assortativities (degree, spatial, industrial) are positive, suggesting that venture capitalists tend to co-invest with their peers. Thirdly, we measure the influence of different proximities (spatial, national and industrial) on the collaborations between the different players. National and industrial proximity have a strong impact on the determination of links. Finally, we provide evidence that past partners are preferred for future syndication, even if new links do appear regularly.

Keywords: Social networks; Venture capital; Syndication strategies; Proximity (search for similar items in EconPapers)
Date: 2008
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Published in George Hendrikse, Mika Tuunanen, Gérard Cliquet and Joseph Windsperger. Strategy and Governance of Networks: Cooperatives, Franchising, and Strategic Alliances, Physica-Verlag HD., pp.373-391, 2008

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05494200

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