Performance feedback as a cooperation 'switch': A behavioral perspective on the success of venture capital syndicates among competitors

摘要

This study draws on the performance feedback theory to advance a behavioral perspective on the dynamics of cooperation among competitors in venture capital (VC) syndicates. Analyzing VC syndicates over a 33-year period, I find that firms' performance relative to historical and social aspirations acts as a switch in firms' behavior with respect to dual goals of cooperation and competition in syndicates with competitors. Competition among firms in a syndicate negatively affects the probability of an IPO, but syndicates composed of firms underperforming their aspirations have a better chance of an IPO than syndicates of firms outperforming their aspirations, ceteris paribus. This effect is stronger when firms' goals in a syndicate are symmetrical or when firms' motivations based on both historical and social aspirations are aligned.