Syndication in Venture Capital Financing

22 Pages Posted: 13 Jul 2010

See all articles by Daniel Deli

Daniel Deli

Securities and Exchange Commission (SEC)

Muku Santhanakrishnan

Southern Methodist University (SMU) - Finance Department


We examine syndication in venture capital (VC) investments between 1980 and 2005. We argue that VC firms syndicate investments to mitigate human capital and financial constraints within individual VC firms and to reduce uncertainty about firm value. Our results are consistent with those arguments. We find that syndication is more likely for firms in the earliest stage of development and firms in the last stage of development as private firms (when human capital investments are greatest), for firms requiring the largest amounts of financial capital, and for firms with greater growth opportunities (those that are most difficult to value).

Suggested Citation

Deli, Daniel and Santhanakrishnan, Mukunthan, Syndication in Venture Capital Financing. Financial Review, Vol. 45, Issue 3, pp. 557-578, August 2010, Available at SSRN: or

Daniel Deli (Contact Author)

Securities and Exchange Commission (SEC)

450 Fifth Street, NW
Washington, DC 20549-1105
United States

Mukunthan Santhanakrishnan

Southern Methodist University (SMU) - Finance Department ( email )

United States

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