Venture Capital Syndication in Germany: Evidence from IPO Data

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Abstract
This paper analyzes the determinants and performance of syndication of venture capital investments. Using a dataset of 153 venture-backed small and medium sized firms listed on the Neuer Markt in Germany we show that neither the selection hypothesis suggested by Lerner (1994) nor the value-added hypothesis introduced by Brander et al. (2002) could be confirmed with this data. Although firms with multiple venture capitalists differ from standalone investments in such characteristics as firm size and age, the study finds no impact of syndication on different performance measures. Again, the major driving forces explaining the performance are firm age and size, as confirmed in the empirical work in industrial organization.