Paper on syndication by venture capital firms in Europe and USA now available

 

My paper on “Syndication and cross-border collaboration by venture capital firms in Europe and the USA: A comparative study” is now published on-line in Venture Capital journal (Taylor & Francis Group). In case of interest a copy of the eprint is available for download here:

https://www.tandfonline.com/eprint/NMVTUNXFICJQI3GJ6SHQ/full?target=10.1080/13691066.2020.1847414

Abstract
Syndication occurs when two or more venture capital (VC) firms invest in the same deal in order to pool resources, information and knowledge and to share financial risk amongst syndicate members. The extent to which US VC firms syndicate with UK/European VCs on UK/European deals (and vice versa) has received little empirical study. This study reviews syndication amongst UK/European and US VCs in order to ascertain their rationales for syndication: themes that are explored include risk sharing, additional finance, and/or value add from the different expertise of syndicate members. The study considers if there are issues with the alignment of interests of syndicate members internationally across borders. The research reveals that whilst European VCs appear willing to syndicate with US VCs, some US VCs have historically been reluctant to syndicate with European VCs. The reasons for this reluctance are addressed and suggestions for greater co-operation between European and US VCs proposed. Funding from US VCs, through collaborative syndicates with European VCs, is necessary to supplement the lack of patient capital in Europe which is required in order to scale up potential high-growth companies.

I am grateful to all of the interviewees for giving up their time to talk to me and to the many people who provided introductions to potential interviewees for the wider study into VC investment practices which formed part of my work towards a doctoral degree at the Adam Smith Business School, University of Glasgow. I am particularly grateful to Professor Colin Mason for his advice, support and encouragement in connection with my PhD research and for his insightful observations and comments on this paper. I also appreciate the feedback received from the reviewers for the ISBE 2018 Conference at which an earlier version of this paper was presented and to Paul Morris of the Venture Capital Unit at the UK Government Department for International Trade for his observations on a subsequent draft. I also thank Beauhurst for providing data specifically for this paper.