Market Competition,The Heterogeneity Of Venture Capitalists And Syndication

Venture capital is vital to the development of a country, Syndicates is a broad form of venture capital. Venture capitalists' experience and professional ability is very important for the success of the project. It always will be two types of people in the syndicates: leader and followers. The leader is the man who is usually experienced. The followers are usually not so experienced. and the two persons both have different professional ability. because of asymmetric information, it will bring the risk of investors "free-rider" moral hazard problem. We must face the problem that how to stimulate the leader and flower contribution to their optimal effort.In this paper, we solve this problem by establishing the mathematical model of quantitative research. we proved that several important conclusions: 1, if the leader's and the followers' professional ability are exactly the same, it is the best choice that the lead venture capitalist devotes all efforts in the syndicates, and at the same time the followers don't need to devote their' efforts.2, if the leader's and the followers' professional ability are not same, we need to do a classified discussion according to the different situation of specialization degree. If the professional ability between the leader and followers is very different, it is the best choice that they all devote their efforts and gain the equity. If the professional ability between the leader and followers is similar, it needs to determine if the followers need to devote their efforts according to the followers' experiences. If the followers' experiences level are very high, they can devote their efforts and participate in the project. If the followers' experiences level are very low, only the lead venture capitalist devote his effort.