Venture Capital Coordination in Syndicates, Corporate Monitoring, and Firm Performance

94 Pages Posted: 9 Aug 2018 Last revised: 18 Oct 2021

See all articles by Jun-Koo Kang

Jun-Koo Kang

Nanyang Business School, Nanyang Technological University

Yingxiang Li

University of British Columbia - Sauder School of Business

Seungjoon Oh

Peking University - HSBC Business School

Date Written: October 16, 2021

Abstract

This paper examines how the coordination of venture capital (VC) investors in their syndicates, as measured by their geographic concentration, affects firm performance and ex ante contractual terms. Using the introduction of new airline routes between the locations of VC investors as a shock to their coordination costs, we find that firms with geographically concentrated VC investors are more likely to exit successfully than other firms. Geographically proximate VC investors are also more likely to form syndicates in follow-up rounds and to use less intensive staged financing and fewer convertible securities.

Keywords: Venture capital, Geographic concentration, Coordination, Monitoring, Exit, Staged financing

JEL Classification: G23, G24, G34

Suggested Citation

Kang, Jun-Koo and Li, Yingxiang and Oh, Seungjoon, Venture Capital Coordination in Syndicates, Corporate Monitoring, and Firm Performance (October 16, 2021). Available at SSRN: https://ssrn.com/abstract=3216018 or http://dx.doi.org/10.2139/ssrn.3216018

Jun-Koo Kang

Nanyang Business School, Nanyang Technological University ( email )

Nanyang Avenue, Block S3-01b-54
Singapore, 639798
Singapore
(+65) 6790-5662 (Phone)
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HOME PAGE: http://www.nbs.ntu.edu.sg/nbs_corporate/divisions/bnf/index.asp

Yingxiang Li

University of British Columbia - Sauder School of Business ( email )

2053 Main Mall
Vancouver, British Columbia V6T 1Z4
Canada

HOME PAGE: http://www.yingxiang-li.com

Seungjoon Oh (Contact Author)

Peking University - HSBC Business School ( email )

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