Why Do European Venture Capital Companies Syndicate?

Sophie Manigart, Hans Bruining, Andy Lockett and Miguel Meuleman

ERIM Report Series Research in Management from Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam

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.

Keywords: financial diversification theory; motivation; resource-based theory; syndication; venture capital strategies (search for similar items in EconPapers)
JEL-codes: G24 L2 M M10 (search for similar items in EconPapers)
Date: 2002-11-04
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Citations: View citations in EconPapers (22)

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