Venture Capital Coordination in Syndicates, Corporate Monitoring, and Firm Performance

Kang, Jun-Koo; Li, Yingxiang; Oh, Seungjoon

doi:10.1016/j.jfi.2022.100948

Cited by 9 publications

(9 citation statements)

References 87 publications

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“…Venture capitalists may syndicate with their counterparts rather than investing in investees alone in order to pool their resources and knowledge and share financial risks (Nanda and Rhodes-Kropf, 2018; Arundale, 2020). The coordination of venture capitalists within syndicates and their effects on portfolio companies still remains unclear (Kang et al. , 2022).…”

Section: Hypotheses Developmentmentioning

confidence: 99%

“…In fact, VCs often syndicate with other VC firms rather than investing in companies alone in order to pool their resources, knowledge and share financial risks (Nanda and Rhodes-Kropf, 2018;Arundale, 2020). Despite the predominance of syndication in the VC industry, the cooperation of VCs and their effects on backed firms are less well understood (Kang et al, 2022). Many researchers allude that VC syndication enhances a company's performance by providing valuable support and resources, but they have differing opinions on the mechanisms that connect syndication networks to positive outcomes and benefits (e.g.…”

Section: Performancementioning

confidence: 99%

“…However, some studies show that VC syndication can be a source of conflict (Cumming, 2006), and this can negatively impact the performance of backed firms and reduce their operational autonomy (Chahine et al, 2012;Nanda and Rhodes-Kropf, 2017). Furthermore, only a few studies have examined the direct effects of VC syndication on innovation and firm performance (Vijande and S anchez, 2017;Falconieri et al, 2019;Banmairuroy et al, 2022;Gomes et al, 2022a, b), but it appears that analyzing the moderating effects of VC syndication on organizational learning (OL) remains an unexplored avenue (Nanda and Rhodes-Kropf, 2018;Yang et al, 2018;Awounou-N'dri and Boufaden, 2020;Kang et al, 2022). To the best of our knowledge, this study is the first in North BPMJ 29,5…”

Section: Performancementioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

“…, 2022a, b), but it appears that analyzing the moderating effects of VC syndication on organizational learning (OL) remains an unexplored avenue (Nanda and Rhodes-Kropf, 2018; Yang et al. , 2018; Awounou-N'dri and Boufaden, 2020; Kang et al. , 2022).…”

Section: Introductionmentioning

confidence: 99%

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The effects of organizational learning on innovation and performance of venture capital-backed firms: the moderating effect of syndication

Laachach

Ettahri

2023

BPMJ

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PurposeDespite the innovation and performance of venture capital (VC)-backed firms receiving extensive attention, how and under what conditions VC influences innovation and performance remains unclear. The present paper draws on organizational learning (OL) theory to examine the moderating effect of syndication on backed firms.Design/methodology/approachDrawing on a literature review that connects OL and innovation to the performance of VC-backed firms, this study examines the effects of OL on innovation and firm performance among these firms by questioning the moderating effect of VC syndication. A sample of 78 VC-backed firms was used to test the robustness of the proposed model and causal relationships through the use of partial least squares structural equation modeling (PLS-SEM).FindingsThe empirical evidence demonstrates that the intervention of venture capitalists can not only stimulate innovation, but also have a significantly positive effect on firm performance. Furthermore, the evidence reveals that syndication of VC investment supports backed firms in improving the firms' performance and generating innovation from acquired knowledge.Originality/valueTo the best of the authors' knowledge, this study is the first in North Africa that focuses on the moderating effects of venture capital syndication on the relationships between OL, innovation and firm performance.

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Section: Hypotheses Developmentmentioning

confidence: 99%

Section: Performancementioning

confidence: 99%

Section: Performancementioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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The effects of organizational learning on innovation and performance of venture capital-backed firms: the moderating effect of syndication

Laachach

Ettahri

2023

BPMJ

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Investment decisions under uncertainty: Corporate venture capital as a real option

et al. 2023

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This paper aims to assess the role of corporate venture capital (CVC) as option‐creating investments and how corporate investors practice CVC options in their investment decisions. Using a sample of 4206 US firms between 1998 and 2019, our results show that sector fit and geographic fit reduce uncertainty and impact investors' decisions on CVC investments. When exogenous uncertainty is mitigated, CVC‐backed companies experience higher investment amounts than independent venture capital funds (IVC)‐backed ones. The results evidence that follow‐on investments motivate IVC‐backed companies to exit via IPOs. At the same time, a prolonged duration for the organisational learning option leads CVC‐backed companies to exit via acquisition. This study helps investors to reduce uncertainty surrounding investments and improve the usefulness of their real options. We also provide implications for how policymakers target and develop an entrepreneurial ecosystem.

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Research on the Behavioral Characteristics and Performance Influence Factors of Venture Capitalists Based on Heterogeneous Networks

Liu,

Jing,

Chi

2023

Communications in Computer and Information Science

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Venture Capital Coordination in Syndicates, Corporate Monitoring, and Firm Performance

Cited by 9 publications

References 87 publications

The effects of organizational learning on innovation and performance of venture capital-backed firms: the moderating effect of syndication

The effects of organizational learning on innovation and performance of venture capital-backed firms: the moderating effect of syndication

Investment decisions under uncertainty: Corporate venture capital as a real option

Research on the Behavioral Characteristics and Performance Influence Factors of Venture Capitalists Based on Heterogeneous Networks

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