Journal of Management Research
Volume 12, Number 2 (August 2012)
ISSN: 0972-5814 Online ISSN: 0974-455X
How Do VC Syndicates Affect Venture Performance New Insights Challenging Old Studies
Charu Agarwal
| Abstract |
Syndicates are good but not always. VC syndication is widely prevalent in entrepreneurial financing and also a well-researched area. A good number of studies have looked into the benefits attached to them while enumerating the various factors that lead to the positive outcome. There have been few studies far in between that hinted towards the negative side of syndication. However, to prove the conditions under which the syndication might not be such a good idea, a detailed study is required to be done. In this paper, I have presented a modified version of well-known model in game theory to drive the important conditions that could lead to sub-optimal venture performance in a syndicate.
Syndication with large number of partners, entering the later rounds of financing, already overseeing
big portfolio of existing investments do not add significant value to the ventures and turn out to exhibit rather sub-optimal performance.
Login