Journal of Financial and Quantitative Analysis Vol. 55 No. 2 2020
Venture Capital Communities
Abstract
Although venture capitalists (VCs) can choose from thousands of potential syndicate partners, many co-syndicate with small groups of preferred partners. We term these groups “VC communities.” We apply computational methods from the physical sciences to 3 decades of syndication data to identify these communities. We find that communities comprise VCs that are similar in age, connectedness, and functional style but undifferentiated in spatial location. Machine-learning tools classify communities into 3 groups roughly ordered by their age and reach. Community VC financing is associated with faster maturation and greater innovation, especially for early-stage firms without an innovation history.
- DOI
- 10.1017/s002210901900005x
- Volume
- 55
- Issue
- 2
- Pages
- 621-651
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref