Impact of Venture Capital Investment Syndication on Enterprise Lifecycle and Success

Siddiqui, A.I., Marinova, D. & Hossain, A. (2016). The impact of venture capital investment syndication on enterprise lifecycle and success. International Journal of Economics and Finance. Vol.8, No. 5.

11 Pages Posted: 16 Jun 2016

See all articles by Asif Siddiqui

Asif Siddiqui

Curtin University

Dora Marinova

Curtin University

Amzad Hossain

Curtin University

Date Written: June 15, 2016

Abstract

The paper investigates the impact of venture capital investment and investment syndication on enterprise lifecycle and success using the exit history of venture capital backed companies in Australia. It has been observed that the venture capital backed companies tend to outperform those which are not while companies receiving syndicates venture capital investment tend to outperform the rest among the venture capital backed companies. In this context, we consider the traditional venture capital investment model and argue that the venture capitalists essentially engages in superior venture selection through pre-investment screening and contributes to entrepreneurial development through post-investment monitoring and value creation. We then empirically investigate the lifecycle of the venture capital backed companies from company formation to first venture capital financing round to exit. Survival duration of the ventures, investment growth and exit status are specifically analysed to capture the lifecycle. The findings show that the survival duration prior and post venture capital investment, venture capital investment growth in successive rounds and investment syndication increase the probably of success for the ventures.

Keywords: venture capital, investment syndication, enterprise lifecycle, survival and sustainability

JEL Classification: G24, L21, L14, M14, O56

Suggested Citation

Siddiqui, Asif and Marinova, Dora and Hossain, Amzad, Impact of Venture Capital Investment Syndication on Enterprise Lifecycle and Success (June 15, 2016). Siddiqui, A.I., Marinova, D. & Hossain, A. (2016). The impact of venture capital investment syndication on enterprise lifecycle and success. International Journal of Economics and Finance. Vol.8, No. 5.. Available at SSRN: https://ssrn.com/abstract=2796021

Asif Siddiqui (Contact Author)

Curtin University ( email )

Kent Street
Bentley
Perth, WA WA 6102
Australia

Dora Marinova

Curtin University ( email )

Kent Street
Bentley
Perth, WA WA 6102
Australia

Amzad Hossain

Curtin University ( email )

Kent Street
Bentley
Perth, WA WA 6102
Australia

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