Use Of Syndication Research Articles

Practical Applications of Syndication Strategies of Venture Capital and Private Equity Firms in India—An Empirical Investigation

In <b><i>Syndication Strategies of Venture Capital and Private Equity Firms in India—An Empirical Investigation</i></b>, from the Fall 2022 issue of <b><i>The Journal of Alternative Investments</i></b>, <b>Poonam Dugar</b> and <b>Mita Suthar</b> of <b>Ahmedabad University</b> find that venture capital and private equity (VCPE) firms considering syndication are influenced by three sets of characteristics: those of the VCPE firm, those of the investee company, and those of the individual VCPE deal. The authors also find that younger VCPE firms and those with domestic investors tend to favor the use of syndication. Meanwhile, younger investee companies and those in the technology/innovation fields are more likely to be the subject of syndicated VCPE financings, as are VCPE financings that are large in size or early in the funding life cycle of the investee company.

Syndicated Equity Crowdfunding: The Trade-Off between Deal Access and Conflicts of Interest

An increasing number of startups raise capital through syndicated equity deals on platforms such as AngelList. Syndication is a useful source of entrepreneurial finance because there are many households that would like to invest in startups and relatively few with the knowledge and networks required for successful outcomes. Accordingly, syndicate leads tend to be well-networked investors. In this paper, we study whether there is a cost to investing alongside leads who have many investment avenues and opportunities. We find that syndicated rounds are riskier and have longer harvesting periods, consistent with the use of syndication as a screening technology for subsequent non-syndicated investments. Companies in which the lead has previously invested tend to perform worse than non-syndicated deals involving the same lead. We also find that syndicated rounds are more likely to be successful if the lead investor has fewer ongoing investments in other companies.

Syndication Networks and Investment Activity in the Venture Capital Industry

The wide-spread use of syndication among venture capital investors has led to the creation of extensive co-investment networks which may in turn affect syndication and investment activity. Using an extensive ten year panel data set of 3,797 venture capital and 1,290 angel investors, this study finds that investors with more direct contacts, in particular with later stage investors, exhibit higher deal flow and faster extend their network. Linking syndication motives to certain network structures allows for inferring on the significance of syndication rationales. Accessing (complementary) resources appears to be the strongest incentive to syndicate, whereas deal sourcing and especially reciprocity considerations appear relatively weak syndication motives. Thereby, using syndicated financing to overcome resource constraints appears even more pivotal for early stage angel investors.

Syndication, Networks and the Growth of Venture Capital in Philadelphia, 1980–99

This paper explores the use of venture capital syndication among venture capital firms in the Philadelphia region from 1980 to 1999. The central question in the analysis is the extent to which regional actors have embraced a new type of investing. To explore this question, the paper looks at the distribution of syndication ties, that is, patterns of co-investment among venture capital firms. In particular, the analysis explores patterns of syndication and network structure among venture capital firms to identify not only the extent of syndication but also cliques and clusters among syndication partners. The analysis utilizes an extensive database consisting of venture capital disbursements and investments in the Philadelphia region from 1980 to 1999. The paper finds that the use of syndication among Philadelphia venture capital firms was limited in nature. Although Philadelphia venture capital firms syndicated extensively with venture capital firms from outside the region, syndication among partners tended to be highly parochial. In addition, the emergence of a dominant clique of venture capital firms is documented, and their impact is discussed.

Reconsidering the Decline of the Editorial Cartoon

Originating in the late nineteenth century, the editorial cartoon began as a mutually beneficial partnership between cartoonists and publishers. Publishers hoped to capitalize on the cartoon's popularity to increase revenue while cartoonists received job security and access to broad audiences. Recently, the future of the editorial cartoon in the United States has been a topic of much debate. Monitoring the decline of employment opportunities, growing editorial controls, and the greater use of syndication gives the impression of a medium in decline. Matt Davies, the head of the Association of American Editorial Cartoonists (AAEC), recently stated that in any given interview he is “invariably asked about the demise of the editorial cartoonist” (Nieman 2004, 6).