Experience, screening and syndication in venture capital investments

Preprint

1 January 2007

preprint
Published by RePEc in RePEc

Abstract

We consider a theoretical model that offers a rationale for the syndication of venture capital investments: syndication improves the screening process of venture capitalists and prevents competition between investors after investment opportunities are disclosed. The analysis identifies the costs of syndication in terms of investment decisions or post-investment involvement of venture capitalists. These costs depend crucially on the level of experience of venture capitalists. The model generates empirical predictions concerning the determinants of syndication and the characteristics of syndicated deals.

Keywords

MODEL
VENTURE
SYNDICATION
DISCLOSED
THEORETICAL
RATIONALE
COMPETITION
INVESTORS
CAPITAL INVESTMENTS

All Related Versions

Version 1, 2007-01-01, RePEc

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