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The Regional Supply of Venture Capital - Can Syndication overcome Bottlenecks?

Michael Fritsch and Dirk Schilder

No 2010-069, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: We investigate whether the supply of venture capital (VC) is driven by spatial proximity between a VC company and the portfolio firm. Our analysis is based on information about VC investments in Germany between 2004 and 2009. We find that possible problems caused by the geographic distance to a portfolio firm seem to be overcome by syndication of investments with one of the VC firms located close to the investment. Our analysis does, however, suggest that short geographic distance between an investor and the investment has an increasing effeon the probability for syndication as well as on the number of firms that join the syndicate. Hence, local VC suppliers may assume a role of an 'anchor' connecting the regional economy to more distant parts of the industry.

Keywords: Venture Capital; syndication; geographic proximity; start-up financing; equity gap (search for similar items in EconPapers)
JEL-codes: D21 G24 M13 O16 R12 (search for similar items in EconPapers)
Date: 2010-10-05
New Economics Papers: this item is included in nep-ent, nep-geo and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: The Regional Supply of Venture Capital: Can Syndication Overcome Bottlenecks? (2012) Downloads
Journal Article: The Regional Supply of Venture Capital: Can Syndication Overcome Bottlenecks? (2012) Downloads
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