Firm Size Effects on Venture Capital Syndication: The Role of Resources and Transaction Costs

33 Pages Posted: 6 Jan 2006

See all articles by Hans Bruining

Hans Bruining

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

Mike Wright

Nottingham University Business School

Ernst Verwaal

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

Andy Lockett

Nottingham University Business School (NUBS)

Sophie Manigart

Vlerick Business School; Ghent University

Date Written: December 13, 2005

Abstract

The present paper examines firm size effects on the decision of venture capital firms to participate in a venture capital investment syndication network. The authors submit that firm size effects in venture capital syndication are dependent on resource acquisition motives and transaction cost considerations. Analysis of 317 venture capital firms in 6 European countries reveals a curve linear relationship between firm size and venture capital syndication participation. We also find positive and negative moderating effects of firm size. The implication of our findings is that there are both advantages and disadvantages in syndicated investment for the smaller and larger venture capitalist.

Keywords: Firm Size, Resource-Based View, Syndication Networks, Transaction Cost Theory, Venture Capital

Suggested Citation

Bruining, Hans and Wright, Mike and Verwaal, Ernst and Lockett, Andy and Manigart, Sophie, Firm Size Effects on Venture Capital Syndication: The Role of Resources and Transaction Costs (December 13, 2005). ERIM Report Series Reference No. ERS-2005-077-STR, Available at SSRN: https://ssrn.com/abstract=870128

Hans Bruining (Contact Author)

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

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)

Ernst Verwaal

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

RSM Erasmus University
Rotterdam, 3000 DR
Netherlands

Queen's University Management School ( email )

25 University Square
Belfast
United Kingdom

Erasmus Research Institute of Management (ERIM)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Andy Lockett

Nottingham University Business School (NUBS) ( email )

Jubilee Campus
Wollaton Road
Nottingham, NG8 1BB
United Kingdom

Sophie Manigart

Vlerick Business School ( email )

Reep 1
Ghent, BE-9000
Belgium

Ghent University ( email )

Sint-Pietersplein 7
Gent, 9000
Belgium

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