Abstract

Venture capital (VC) firms often syndicate to reduce risk, improve screening and monitoring of ventures, and enhance the chance of successful exits, etc. Research on VC syndicate formation, consistent with the current literature on network formation in general, has largely been focused on partnership formation from the perspective of partners. Despite being the ones who solicit VC funding, the founders’ influence on VC syndicate formation has been neglected in the current literature. This paper fills this gap by comparing serial and novice entrepreneurs. It adds value to entrepreneurship literature by examining how founders may have an influence on the composition and attributes of VC syndicates. Unlike previous research in entrepreneurship that often assumes a passive role of startup companies in VC financing, this paper demonstrates that the founders’ influence on financing is more than just signaling; indeed, founders may actively exert influence on the composition of VC syndicates.

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