Syndication and cross-border collaboration by venture capital firms in Europe and the USA: a comparative study

摘要

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.