Performance effects of venture capital firm networks

The purpose of this paper is to explore the networking effects of venture capital (VC) firms on portfolio companies. VCs can bring specific skills and abilities to their ongoing relationships with their portfolio companies and thus add value by influencing key portfolio company operations. High levels of engagement also translate into giving advice and support, helping with the team culture, creating strategic alliances, or exercising corporate governance. A particular mechanism through which these support services are delivered is syndication investment.

Using network theory tools the paper investigates the effects of syndication on VC firm performance.

The paper finds that networked VC firms are better placed to benefit from their investments.

The paper sheds light on the importance of network relationships in the venture capital industry.