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This paper has contributed to an analysis of syndication, an area of venture capital which has been relatively neglected. The analysis has identified the factors influencing the syndication decision in the UK management buy–out and buy–in market, the most significant part of the UK venture capital industry. The analysis has also shown a very high degree of network intensity between the major venture capital players in the UK buy–out and buy–in market.

The findings have important implications for researchers. First, partly because of the huge demands on information availability, we have focused only on one part of the market. Further research might usefully extend the analysis to other parts of venture capital markets in differing countries. Second, there is a paucity of theoretical modelling of the syndication decision both in general and in the venture capital industry in particular. Third, the syndication process is as yet little understood. How do venture capitalists identify syndication partners? Does syndication involve joint decision–making or decisions by a lead investor? What happens in cases where a potential syndicate partner declines to invest? How do monitoring arrangements differ in syndicated investments from non–syndicated ones? Are there any differential performance effects of investments which are syndicated and those which are not? Direct evidence on these and other aspects of the syndication process would appear warranted.

The results presented here also have implications for practitioners, both entrepreneurs and venture capitalists. For the latter, they provide a general picture of the influences on syndication which may serve to complement their own experience. The results of the survey all suggest that venture capitalists’ perceptions of changes in syndication arrangements in recent years may need to be revised. Across the market as a whole, there has been little significant change. It would appear that recent discussions apply particularly to a relatively small number of large deals.

For entrepreneurs, the findings indicate the likelihood of their project being funded through a syndicate of venture capitalists according to certain characteristics of the project itself and according to the type of venture capitalist they approach. Entrepreneurs concerned about potential difficulties in dealing with syndicates of financiers may seek to select venture capital firms which are less prone to syndication – the trade–off may be that they need to approach venture capitalists who are not the lead players in the market.

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