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Do venture capital firms benefit from international syndicates?

Author

Listed:
  • Arif Khurshed

    (University of Manchester)

  • Abdulkadir Mohamed

    (Leeds University Business School)

  • Armin Schwienbacher

    (Université Côte d’Azur)

  • Fan Wang

    (University of Manchester)

Abstract

This paper examines the benefits of syndicating with foreign venture capital (VC) firms for domestic VC firms in emerging markets. We find that the VC firms that are domestic to their invested companies and previously syndicated with foreign partners invest proportionately more frequently in riskier ventures. After gaining syndication experience with foreign VC firms, a larger number of their portfolio companies are successfully exited, thereby suggesting improved performance. We hypothesize that this outcome is due to the organizational learning effects. While the previous research has shown benefits for foreign VC firms, our results show that domestic VC firms also benefit from international syndication through improved investments.

Suggested Citation

  • Arif Khurshed & Abdulkadir Mohamed & Armin Schwienbacher & Fan Wang, 2020. "Do venture capital firms benefit from international syndicates?," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(6), pages 986-1007, August.
    • Handle: RePEc:pal:jintbs:v:51:y:2020:i:6:d:10.1057_s41267-019-00296-8
    DOI: 10.1057/s41267-019-00296-8
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    6. Jonathan Labbé, 2020. "Venture capital risk, start-ups and innovation: the syndication of venture capital investments recipe [Capital-risque, start-ups et innovation : la recette du financement par syndication]," Post-Print hal-03000103, HAL.

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