Why do European Venture Capital Companies Syndicate?

Hans Landström ()
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Hans Landström : Department of Business Administration, School of Economics and Management, Lund University, Postal: Department of Business Administration, School of Economics and Management, Lund University, Box 7080, SE-220 07 Lund, Sweden

No 2002/5, Working Paper Series from Lund University, Institute of Economic Research

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 theory; share risk (search for similar items in EconPapers)
Pages: 30 pages
Date: 2004-06-19
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Published in 2002/5, 2002, pages 30.

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Persistent link: https://EconPapers.repec.org/RePEc:hhb:lufewp:2002_005

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