earticle

영어

Using all financing rounds for new ventures from 1980-2003, we develop a detailed empirical model to explain which portfolio companies obtain Venture Capital (VC) syndication. We then assess how syndication impacts portfolio companies’ returns, their chances of successful exit, and the time taken to exit. Applying apposite econometrics for endogeneity across these different performance measures, we are able to ascribe much of the better return to selection, with the value-add role significantly impacting the likelihood and time of exit. Though the extant literature on VC syndication treats the “selection” and “value-add” hypotheses as mutually exclusive, we find that their roles are in fact complementary. To this end we propose a new “effort-sharing” model of venture syndication.