Location of Repository

Geographical and institutional distances in venture capital deals: How syndication and experience drive internationalization patterns

By Tereza Tykvová and Andrea Schertler


Drawing on a novel dataset of worldwide venture capital deals, we investigate how venture capitalists (VCs) overcome the complexity of investing in geographically and institutionally distant regions. Our results indicate that syndicating with local VCs is a common way for foreign VCs to gain deal access, overcome the complexity of investing in distant regions and offset their lack of within-country experience. The foreign VC's distance from the portfolio company ceases to be a serious investment obstacle when he can rely on a highly experienced local VC. Our results further suggest that inexperienced VCs, i.e. those VCs with a large need for syndication, increase their chances to invest across borders when they invest in small deals jointly with local inexperienced partners. --Multiple Regression Analysis,Syndicates,Venture Capital,Internationalization,Distance,Experience

OAI identifier:

Suggested articles



  1. (2000). A censored system of cigarette and alcohol consumption.
  2. (1989). A double-hurdle model of cigarette consumption.
  3. (2001). A theory of the syndicate: Form follows function.
  4. (1980). Analysis of covariance with qualitative data.
  5. (2008). Are corporate governance systems typologies relevant? Evidence from European transfers of ownership rights.
  6. (1970). Asymptotic properties of conditional maximum-likelihood estimators.
  7. (2004). Bank versus venture capital: Project evaluation, screening, and expropriation.
  8. (2001). Categorical data analysis (2nd ed).
  9. (2004). Characteristics, contracts, and actions: Evidence from venture capitalist analyses.
  10. (2009). Competition or collaboration? The reciprocity effect in loan syndication. Available at SSRN:
  11. (2001). Convertible securities and optimal exit decisions in venture capital finance.
  12. (2011). Cross border private equity syndication: institutional context and learning.
  13. (2004). Cross-border bank mergers: What lures the rare animal?
  14. (2003). Cultural conflict and merger failure: An experimental approach.
  15. (1975). Direct and inverse solutions of geodesics on the ellipsoid with application of nested equations.
  16. (2010). Distance and private information in lending.
  17. (2010). Do cultural differences between contracting parties matter? Evidence from syndicated bank loans.
  18. (2010). Do foreign investors exhibit a corporate governance disadvantage? An information asymmetry perspective.
  19. (2009). Do private equity owned firms have better management practices?
  20. (2003). Economic development, legality, and the transplant effect.
  21. (2009). Estimating standard errors in finance panel data sets: Comparing approaches.
  22. (1958). Estimation for relationships with limited dependent variables.
  23. (2003). Financial contracting theory meets the real world: An empirical analysis of venture capital contracts.
  24. (2010). Government sponsored versus private venture capital: Canadian evidence. NBER Chapters, in:
  25. (1996). Grandstanding in the venture capital industry.
  26. Guillén (2010a). Knowledge, institutions and organizational growth: The internationalization of U.S. venture capital firms.
  27. Guillén (2010b). Home-country networks and foreign expansion: Evidence from the venture capital industry.
  28. (1999). Home bias at home: Local equity preference in domestic portfolios.
  29. (2001). How distance, language, and culture influence stockholdings and trades.
  30. (2008). How do firms learn to make acquisitions? A review of past research and an agenda for the future.
  31. (1998). How venture capital works. Harvard Business Review:
  32. (2007). Human capital and the internationalisation of venture capital.
  33. (1994). Impact of agency risks and task uncertainty on venture capitalistCEO interaction.
  34. (1996). Individual cigarette consumption and addiction: A flexible limited dependent variable approach.
  35. (2003). Interaction terms in logit and probit models.
  36. (2005). International venture capital research: From cross country comparisons to crossing countries.
  37. (1998). Law and finance.
  38. (2008). Lead arranger reputation and the loan syndication market.
  39. (2006). Legality and venture capital exits.
  40. (2010). Local bias in venture capital investments.
  41. (2005). Local does as local is: Information content of the geography of individual investors’ common stock investments.
  42. (2001). Logistic regression in rare events data.
  43. (1996). National and corporate cultural fit in merger/acquisitions: An exploratory study.
  44. (2009). Peer monitoring and venture capital expertise: Theory and evidence on syndicate formation and the dynamics of VC interactions. Available at SSRN:
  45. (2009). Private equity involvement and earnings quality. SSRN working paper.
  46. (2010). Private equity returns and disclosure around the world.
  47. (2009). Private equity syndication: Agency costs, reputation and collaboration.
  48. (2006). Provincial preferences in private equity.
  49. (2005). Proximity and innovation: a critical assessment.
  50. (1973). Regression analysis when the dependent variable is truncated normal.
  51. (1995). Reliance upon informants in the venture capital industry.
  52. (1979). Sample selection bias as a specification error.
  53. (1971). Some statistical models for limited dependent variables with application to the demand for durable goods.
  54. (2009). Staffing venture capital firms' overseas operations.
  55. (1987). Syndicated investments by venture capital firms: A networking perspective.
  56. (2008). The change in ownership after a buyout: Impact on performance.
  57. (2009). The choice of going public and going private: Evidence from UK. Working paper.
  58. (2007). The design of syndicates in venture capital.
  59. (2000). The determinants of venture capital funding: Evidence across countries.
  60. (1988). The effect of national culture on the choice of entry mode.
  61. (2008). The geography of block acquisitions.
  62. (2008). The internationalization of venture capital and private equity.
  63. (2010). The interplay of need and opportunity in venture capital investment syndication.
  64. (2008). The pecking order of cross-border investment.
  65. (2009). The role of venture capital syndication in value creation for entrepreneurial firms
  66. (2002). The spatial clustering of science and capital: Accounting for biotech firm–venture capital relationships.
  67. (2003). The structure and management of alliances: Syndication in the venture capital industry.
  68. (1994). The syndication of venture capital investments.
  69. (2004). Transaction structures in the developing world: Evidence from private equity. MIT Sloan Working Paper No. 4468-04. Available at SSRN:
  70. (2009). Understanding global flows of venture capital: Human networks as the “carrier wave” of globalization.
  71. (1988). Venture capital and high technology entrepreneurship.
  72. (2011). Venture capital and internationalization.
  73. (1998). Venture capital and the structure of capital markets: Banks versus stock markets.
  74. (2009). Venture capital performance: The disparity between Europe and the United States. Revue de l'association française de finance 30:
  75. (2002). Venture capital syndication: Improved venture selection versus value-added hypothesis.
  76. (1995). Venture capitalists and the oversight of private firms.
  77. (2004). What do entrepreneurs pay for venture capital affiliation?
  78. (1989). What do venture capitalists do?
  79. (2009). What drives private equity activity and success globally? In: World Economic Forum, Globalization of Alternative Investments Working Papers Volume 2. The Global Economic Impact of Private Equity Report
  80. (2009). What is the role of legal systems in financial intermediation? Theory and evidence.
  81. (2007). Who chooses whom? Syndication, skills and reputation.
  82. (2004). Why do venture capital companies syndicate? Working Papers of

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.