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Syndication, investment horizon, and managerial effort in venture capital
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DOI：10.1007/s10101-026-00351-9.png)
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Abstract
En 中文
In this paper, we construct a model in which a lead Venture Capital investor forms a syndicate to invest in an entrepreneurial project. Syndicate members have different investment horizon preferences and bear the cost of delay whenever the lead investor's investment horizon is greater than theirs. Optimal syndicate size is formed by a trade-off between the success probability of the project, which increases with syndicate size and the extra equity share that the lead investor has to offer because of the delay cost that the marginal syndicate member bears. We also show that syndicate size is decreasing in the lead investor's investment horizon preference and induces incentive effects on the lead investor's managerial effort that in turn affect the success probability of the project.
Keywords:
Entrepreneurship
Venture Capital
Syndication
Moral hazard
Investment horizon
D82
G24
G32
L24
L26
Journal
E
IF:
0.8
Papers:
19
Citations:
453
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Cited Papers