Abstract

http://ssrn.com/abstract=1567430
 
 

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Syndicating Venture Capital Investments: An Integrated Benefit/Cost Framework and Analysis


Wouter De Maeseneire


Vlerick Business School; Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE)

Rutger Van Halder


Goldman Sachs International, London

March 9, 2010


Abstract:     
This paper focuses on the syndication of venture capital investments. We present a comprehensive framework that simultaneously integrates the benefits and drawbacks of syndication. Our empirical analysis uses a sample of UK venture capitalists’ investments made between 1964 and 2006. We collected data about three different units of analysis: venture capital firm level, portfolio company level and investment round level. Overall, we find evidence for the main motivations to syndicate, namely the finance, resource based and deal flow rationales. Furthermore, indirect support for the window dressing and agency problem motives is established. We also confirm the importance of transaction costs. Hence, VCs’ syndication decisions are driven by the benefits and costs of syndication.

Number of Pages in PDF File: 48

Keywords: syndication, venture capital, private equity, transaction costs, resource based view

JEL Classification: G32

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Date posted: March 10, 2010  

Suggested Citation

De Maeseneire, Wouter and Van Halder, Rutger, Syndicating Venture Capital Investments: An Integrated Benefit/Cost Framework and Analysis (March 9, 2010). Available at SSRN: http://ssrn.com/abstract=1567430 or http://dx.doi.org/10.2139/ssrn.1567430

Contact Information

Wouter De Maeseneire (Contact Author)
Vlerick Business School ( email )
Reep 1
Ghent
BE-9000 Ghent
Belgium
Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )
P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands
Rutger Van Halder
Goldman Sachs International, London ( email )
Peterborough Court
133 Fleet Street
London, EC4A 2BB
United Kingdom
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