Startup valuation and the venture capital syndication hypothesis
Name
1200237521-MIT.pdf
Size
2.02 MB
Format
Adobe PDF
Checksum (MD5)
d9285a23e0104bb702db022595d0318c
Author(s)
Shin, Albert,S.M.Massachusetts Institute of Technology.
Advisor(s)
Antoinette Schoar.
Date Issued
2020
Publisher
Massachusetts Institute of Technology
Abstract
We formally replicate and extend Gompers and Lerner's (2000) findings that positively link venture capital fund flows to startup valuation. We confirm most of the original findings. However, we find a divergence in venture capital fund sizes and startup valuation in recent years. Specifically, the average pre-money valuation of a startup has grown dramatically larger relative to the increase in VC funding. We put forth a "syndication hypothesis" to explain this phenomenon. The funding landscape has changed from a co-opetitive model to a more competitive one as evidenced by less demand for deal syndication. We test a broad version of this hypothesis for both institutional and angel investors and find that the overall degree of syndication has fallen since the 1980s.
Description
Thesis: S.M. in Management Research, Massachusetts Institute of Technology, Sloan School of Management, May, 2020
Cataloged from the official PDF of thesis.
Includes bibliographical references (page 13).
Subjects
Sloan School of Management.
MIT Department
Sloan School of Management
Terms of Use
MIT theses may be protected by copyright. Please reuse MIT thesis content according to the MIT Libraries Permissions Policy, which is available through the URL provided.
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