Scandinavian Working Papers in Business Administration
Working Paper Series,
Lund University, Institute of Economic Research
No 2002/5: Why do European Venture Capital Companies Syndicate?
Hans Landström ()
Additional contact information
Hans Landström: Department of Business Administration, School of Economics and Management, Lund University, Postal: Department of Business Administration, School of Economics and Management, Lund University, Box 7080, SE-220 07 Lund, Sweden
Abstract: Financial theory, resource-based theory and access to deal flow are used to explain syndication practices among European venture capital (VC) firms. The desire to share risk and increase portfolio diversification is a more important motive for syndication than the desire to access additional intangible resources or deal flow. Access to resources is, however, more important for non-lead than for lead investors. When resource-based motives are more important, the propensity to syndicate increases. Syndication intensity is higher for young VC firms and for VC firms, specialised in a specific investment stage. Finally, syndication strategies are similar across European countries, but differ from North American strategies.
Keywords: Financial theory; share risk
30 pages, June 19, 2004
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