Do venture capital firms benefit from international syndicates?

Arif Khurshed (), Abdulkadir Mohamed (), Armin Schwienbacher and Fan Wang ()
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Arif Khurshed: University of Manchester
Abdulkadir Mohamed: Leeds University Business School
Fan Wang: University of Manchester

Journal of International Business Studies, 2020, vol. 51, issue 6, No 5, 986-1007

Abstract: Abstract This paper examines the benefits of syndicating with foreign venture capital (VC) firms for domestic VC firms in emerging markets. We find that the VC firms that are domestic to their invested companies and previously syndicated with foreign partners invest proportionately more frequently in riskier ventures. After gaining syndication experience with foreign VC firms, a larger number of their portfolio companies are successfully exited, thereby suggesting improved performance. We hypothesize that this outcome is due to the organizational learning effects. While the previous research has shown benefits for foreign VC firms, our results show that domestic VC firms also benefit from international syndication through improved investments.

Keywords: organizational learning; venture capital; syndication; cross-border investments (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (8)

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DOI: 10.1057/s41267-019-00296-8

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