Venture Capital Syndicates Network: Formation, Evolution and the Architecture
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This paper develops a simple network formation game model that recapitulates the critical phases in the history of the Venture Capital (VC) industry. With the reciprocity of deal flows and trust among VC firms in the same local VC market, we simplify this network formation game as a simultaneous-move directed network formation game. The local fragmentation and the global connectivity were two distinct features in the early history of VC industry. The former is driven by the new entrants at the regional level (or local level) and the latter is by incumbent firms that seek diversification. Our model details the formation of the local VC syndicate networks and the global connectivity in the whole VC syndicates network. Also, with the massive influx of new entrants, the VC industry evolved into an interlinked, multi-layer, periphery-sponsored stars network, which is also evidenced by the history of the VC industry.
Abstract
This paper develops a simple network formation game model that recapitulates the critical phases in the history of the Venture Capital (VC) industry. With the reciprocity of deal flows and trust among VC firms in the same local VC market, we simplify this network formation game as a simultaneous-move directed network formation game. The local fragmentation and the global connectivity were two distinct features in the early history of VC industry. The former is driven by the new entrants at the regional level (or local level) and the latter is by incumbent firms that seek diversification. Our model details the formation of the local VC syndicate networks and the global connectivity in the whole VC syndicates network. Also, with the massive influx of new entrants, the VC industry evolved into an interlinked, multi-layer, periphery-sponsored stars network, which is also evidenced by the history of the VC industry.
참고문헌 (26)
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