We extend the current literature on venture capital syndication by introducing and testing an argument how firm level investment strategies moderate the benefits from syndication. Syndication of investments with other investors serves as a resource acquisition strategy enhancing the quality of the deal flow, consequent investment decisions and the post-investment activities. Thus, syndication provides venture capital firms access to valuable network resources that contribute to the performance of the venture capitalists.

The benefits of syndication are likely to be affected by the quality of syndicated deals and partners. Thus, we hypothesize that VCs with good track-record, high status, and expertise are more attractive as syndication partners, and thus should be able to pick from larger pool of investments, consequently leading to enhanced financial performance. Additionally, we propose that the more VC relies on syndication to generate deal flow, the more it is reliant on externally controlled deal flow. Lack of VC’s attractiveness as a co-investor leads to lower quality deals it has to accept, thereby leading to lowered financial performance for VCs with extensive syndication.