Firm Size Effects on Venture Capital Syndication: The Role of Resources and Transaction Costs

The present paper examines firm size effects on the decision of venture capital firms to participate in a venture capital investment syndication network. The authors submit that firm size effects in venture capital syndication are dependent on resource acquisition motives and transaction cost considerations. Analysis of 317 venture capital firms in 6 European countries reveals a curve linear relationship between firm size and venture capital syndication participation. We also find positive and negative moderating effects of firm size. The implication of our findings is that there are both advantages and disadvantages in syndicated investment for the smaller and larger venture capitalist.Firm Size;Resource-Based View;Syndication Networks;Transaction Cost Theory;Venture Capital

Signal Strength, Media Attention, and Resource Mobilization: Evidence from New Private Equity Firms

This is the author accepted manuscript. The final version is available from the Academy of Management via the DOI in this recordPast research has shown that new firms can facilitate resource mobilization by signaling their unobservable quality to prospective resource providers. However, we know less about situations in which firms convey multiple signals of different strengths—i.e., signals that are more or less correlated with unobservable firm quality. Building on a sociocognitive perspective, we propose that prospective resource providers respond differently to signals of different strengths and that the effectiveness of signals, especially weak signals, will be contingent on the media attention new firms receive. Empirically, we conduct a longitudinal analysis examining the ability of new private equity (PE) firms to raise a follow-on fund. Consistent with our theory, we find that unrealized performance, a relatively weak signal, positively influences fundraising. But we fail to find statistical evidence that its effect is weaker than that of realized performance, a relatively strong signal. Further, media attention strengthens the relationship between unrealized performance and fundraising, but media attention exerts less impact on the relationship between realized performance and fundraising. Taken together, our findings deepen our understanding of how new firms can mobilize resources with signals of different strengths and of how the media—as a key information intermediary—differently impacts their effectiveness.Richard M. Schulze Family Foundatio

Why Do European Venture Capital Companies Syndicate?

Financial theory, resource-based theory and access to deal flow are used to explain syndication practices among European venture capital (VC) firms. The desire to share risk and increase portfolio diversification is a more important motive for syndication than the desire to access additional intangible resources or deal flow. Access to resources is, however, more important for non-lead than for lead investors. When resource-based motives are more important, the propensity to syndicate increases. Syndication intensity is higher for young VC firms and for VC firms, specialised in a specific investment stage. Finally, syndication strategies are similar across European countries, but differ from North American strategies

Firm Size Effects on Venture Capital Syndication: The Role of Resources and Transaction Costs

The present paper examines firm size effects on the decision of venture capital firms to participate in a venture capital investment syndication network. The authors submit that firm size effects in venture capital syndication are dependent on resource acquisition motives and transaction cost considerations. Analysis of 317 venture capital firms in 6 European countries reveals a curve linear relationship between firm size and venture capital syndication participation. We also find positive and negative moderating effects of firm size. The implication of our findings is that there are both advantages and disadvantages in syndicated investment for the smaller and larger venture capitalist

Timing and source of subtype-C HIV-1 superinfection in the newly infected partner of Zambian couples with disparate viruses

BACKGROUND: HIV-1 superinfection occurs at varying frequencies in different at risk populations. Though seroincidence is decreased, in the negative partner of HIV-discordant couples after joint testing and counseling in the Zambia Emory HIV Research Project (ZEHRP) cohort, the annual infection rate remains relatively high at 7-8%. Based on sequencing within the gp41 region of each partner's virus, 24% of new infections between 2004 and 2008 were the result of transmission from a non-spousal partner. Since these seroconvertors and their spouses have disparate epidemiologically-unlinked viruses, there is a risk of superinfection within the marriage. We have, therefore, investigated the incidence and viral origin of superinfection in these couples. RESULTS: Superinfection was detected by heteroduplex mobility assay (HMA), degenerate base counting of the gp41 sequence, or by phylogenetic analysis of the longitudinal sequences. It was confirmed by full-length env single genome amplification and phylogenetic analysis. In 22 couples (44 individuals), followed for up to five years, three of the newly infected (initially HIV uninfected) partners became superinfected. In each case superinfection occurred during the first 12 months following initial infection of the negative partner, and in each case the superinfecting virus was derived from a non-spousal partner. In addition, one probable case of intra-couple HIV-1 superinfection was observed in a chronically infected partner at the time of his seroconverting spouse's initial viremia. Extensive recombination within the env gene was observed following superinfection. CONCLUSIONS: In this subtype-C discordant couple cohort, superinfection, during the first year after HIV-1 infection of the previously negative partner, occurred at a rate similar to primary infection (13.6% [95% CI 5.2-34.8] vs 7.8% [7.1-8.6]). While limited intra-couple superinfection may in part reflect continued condom usage within couples, this and our lack of detecting newly superinfected individuals after one year of primary infection raise the possibility that immunological resistance to intra-subtype superinfection may develop over time in subtype C infected individuals