Syndication In The Venture Capital Industry

Venture capital,including effective combination of the two key production factors of knowledge and capital, plays a key role in modern economic development, and has been promoting human progress effectively. At present, the study in our country on venture capital mostly focuses on the macroscopic aspect, While obviously pays less attention on the research of microscopic aspect,such as venture capital industry syndication. However, due to the nature high risk in venture capital, it becomes the urgent issue that how to reducing the investment risk as well as obtaining the higher income. Syndication, as the most frequently used and effective investment strategy against the risk in venture capital, exploring its basic structure, content, rules has an important theory value and realistic meaning.The research content of this thesis is the syndication in venture capital industry. Through analyzing and summarizing the existing syndication investment on venture capital, this article attempts structure a theoretical frame of syndication, based on the syndication decision model and syndication management. This article mainly makes the following achievement. Firstly, through introducing two models, it finds out the influence of capital and information the two key factors to syndication strategy: from capital point of view, the adoption of syndication strategy is influenced by the amount of investment and venture capital company' bearing ability on the risk; while from information point of view, on account of the great uncertainty of venture capital project, the judgments of individual venture capital companies on the project is easily doubted, venture capital company needs to adjust its investing strategy in virtue of other companies' investing judgment. Capital and information are the two pivotal influencing factors in adopting syndication, and synthetically considering this two factors is advantage for venture capital companies to make right investing strategy; Secondly, the article also explore management in syndication. Syndication leads to the coordination issue among venture capital companies, the trust between venture capital companies is the basis of syndication carrying smoothly, additionally in order to reach a higher coordination, it is necessary of the agreement restriction and management specialization, etc.This article explores the syndication strategy that is widely uses in venture capital industry, expects this paper can bring the in-depth learning of syndication in the venture capital industry, and provides the theoretical basis on venture capital development and to make better use of syndication strategy for venture companies.