Syndication of Venture Capital Investments

Inhaltsangabe:Abstract: Cooperation among financial institutions is a persistent feature of the equity issuance process. Also the syndication of venture capital investments is common practice among venture capitalists. Despite the importance of syndication surprisingly little is known on the motives and structure of syndication. Further-more there is hardly any empirical evidence for Europe or particularly Germany on the syndication behaviour of VC organisations and the factors influencing their overall propensity to co-invest. On the one hand the purpose of this paper is to compile and summarise all aspects of the existing theory on VC syndication. Therefore the evidence from the few empirical studies that were so far carried out on this topic is discussed. Thus the general theory on syndication which is thought to be independent from peculiar VC industries serves as the framework throughout this paper which is complemented by the results of the empirical analyses done so far by different authors. On the other hand this text has also an explorative component where it is analysed if and to what degree findings of the existing studies also hold for the German VC market. This analysis is done by the use of a data base listing a total of 3230 VC investments in German portfolio companies. The nature of the data base at hand is not designed to allow for conclusions on all relevant aspects of syndication. But the claim of this paper is to use and analyse it whenever it is possible and the data base can be linked to aspects on syndication discussed throughout the different chapters. Firstly this paper gives a theoretical overview on general motives behind VC syndication which leads to a discussion which rational is more important in explaining VC syndicates and if there are differences between the North American and European VC market with regards to this. Then as the principal part of this paper various factors influencing the propensity of VC investors to