Foreign Venture Capital Firms in a Cross-Border Context: Empirical Insights from India

Kshitija Joshi, Deepak Chandrashekar, Alexander Brem and Kirankumar S. Momaya
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Kshitija Joshi: School of Social Sciences, National Institute of Advanced Studies, Bengaluru 560012, India
Deepak Chandrashekar: Xavier Institute of Management and Entrepreneurship, Bengaluru 560100, India
Kirankumar S. Momaya: Shailesh J. Mehta School of Management, Indian Institute of Technology Bombay, Mumbai 400076, India

Sustainability, 2019, vol. 11, issue 22, 1-20

Abstract: Syndication or co-investment is a potent way of pooling resources among peer Venture Capital (VC) firms. This is even more vital for Foreign VC firms (FVCFs) when investing in destinations that are geographically distant from their countries of origin. Although FVCFs are relatively abundantly endowed in terms of financial capital, they are distinctly disadvantaged in terms of their social capital when investing in geographies that are distinctly different in terms of their institutions, norms, and culture from their own. One of the ways in which FVCFs overcome this impediment is by investing in human resources that serve as a bridge between their financial and social capital. Accordingly, the primary aim of this study is to investigate the relationship between the resources of FVCFs and their syndication intensity. Using the technique of logistic regression, we arrive at several interesting findings. FVCFs with a greater proportion of investment executives with prior founding experience in India and those with lower proportions of professionals of Indian origin demonstrate lower syndication intensity. Similarly, the syndication intensity diminishes with the increase in size of the investing team. FVCFs with greater fund size demonstrate a lower need for syndication. Greater endowment of social capital as proxied by the age of the VC firm is seen to enhance the syndication intensity.

Keywords: syndication; foreign VCs; VC sustainability; VC risk management; human capital; social capital (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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