Why Do European Venture Capital Companies Syndicate?

37 Pages Posted: 18 Jan 2003

See all articles by Sophie Manigart

Sophie Manigart

Vlerick Business School; Ghent University

Mike Wright

Nottingham University Business School

Andy Lockett

Nottingham University Business School (NUBS)

Miguel Meuleman

Vlerick Business School; University of Nottingham

Hans Landström

Lund University - Lund Institute of Economic Research

Hans Bruining

Erasmus University Rotterdam (EUR) - Department of Strategic Management and Entrepreneurship; Erasmus Research Institute of Management (ERIM)

Philippe Desbrieres

Université de Bourgogne

Ulrich Hommel

WHU - Otto Beisheim School of Management - Chair of International Corporate Finance

Date Written: April 2002, 11

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: resource-based theory, financial diversification theory, motivation, syndication, venture capital strategies

JEL Classification: M, M10, L2, G24

Suggested Citation

Manigart, Sophie and Wright, Mike and Lockett, Andy and Meuleman, Miguel and Landström, Hans and Bruining, Hans and Desbrieres, Philippe and Hommel, Ulrich, Why Do European Venture Capital Companies Syndicate? (April 2002, 11). ERIM Report Series Reference No. ERS-2002-98-ORG, Available at SSRN: https://ssrn.com/abstract=371048

Sophie Manigart (Contact Author)

Vlerick Business School ( email )

Reep 1
Ghent, BE-9000
Belgium

Ghent University ( email )

Sint-Pietersplein 7
Gent, 9000
Belgium

Mike Wright

Nottingham University Business School ( email )

Jubilee Campus
Wollaton Road
Nottingham, NG8 1BB
United Kingdom
+44 115 951 5257 (Phone)
+44 115 951 5204 (Fax)

Andy Lockett

Nottingham University Business School (NUBS) ( email )

Jubilee Campus
Wollaton Road
Nottingham, NG8 1BB
United Kingdom

Miguel Meuleman

Vlerick Business School ( email )

Reep 1
Gent, 9000
Belgium
0032(0)92109770 (Phone)
0032(0)92109790 (Fax)

University of Nottingham

University Park
Nottingham, NG8 1BB
United Kingdom

Hans Landström

Lund University - Lund Institute of Economic Research

P O Box 7080
SE-220 07 LUND
Sweden

Hans Bruining

Erasmus University Rotterdam (EUR) - Department of Strategic Management and Entrepreneurship ( email )

RSM Erasmus University
Rotterdam, 3000 DR
Netherlands

Erasmus Research Institute of Management (ERIM)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Philippe Desbrieres

Université de Bourgogne ( email )

Institut d'Administration des Entreprises
21066 Dijon Cedex
France

Ulrich Hommel

WHU - Otto Beisheim School of Management - Chair of International Corporate Finance ( email )

Burgplatz 2
D-56179 Va
Germany
49-261-6509 252 (Phone)
49-261-61753 (Fax)

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