Abstract

Venture capital (VC) firms often form syndicates to back up startup companies. However, despite the importance of syndication, what kinds of VC syndicates are more likely to be helpful are still underexplored. In this paper, we examine whether, and when, internal and external syndicate structures may facilitate the success of startup companies. Using archival data of VC investments from the period 1985–2000, we found that both internal syndicate density and external structural holes positively influenced the performance of startup companies. The positive impact of syndicate density is greater in syndicates with larger size and/or more experience heterogeneity.

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