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Article
Polishing diamonds in the rough: the sources of syndicated venture performance
Accounting
Document Type
Article
Publication Date
4-1-2011
Publisher
Elsevier B.V.
Disciplines
Abstract
Using an effort-sharing framework for VC syndicates, we assess how syndication impacts investment returns, chances of successful exit, and the time taken to exit. With data from 1980-2003, and applying apposite econometrics for endogeneity to these different performance measures, we are able to ascribe much of the better return to selection, with the value-addition by monitoring role significantly impacting the likelihood and time of exit. While the extant literature on Venture Capital (VC) syndication is divided about the relative importance of the "selection" and "value-add" hypotheses, we find that their roles are complementary.
Comments
NOTICE: this is the author's version of a work that was accepted for
publication in Journal of Financial Intermediation. Changes resulting from the
publishing process, such as peer review, editing, corrections,
structural formatting, and other quality control mechanisms may not be
reflected in this document. Changes may have been made to this work
since it was submitted for publication. A definitive version was
subsequently published in Journal of Financial Intermediation, Vol. 20, No. 2, (2011) doi:10.1016/j.jfi.2010.08.001
Citation Information
Das, Sanjiv R., Hoje Jo, and Yongtae Kim. "Polishing Diamonds in the Rough: The Sources of Syndicated Venture Performance." Journal of Financial Intermediation 20.2 (2011): 199-230.