United We Stand? Venture-Capital Syndicates' Joint Co-investment Experience and Entrepreneurial Exits

Although past work has chronicled the benefits of repeated syndication among venture capital firms (VC) for themselves and their portfolio firms, we argue that different patterns of syndication lead start-ups to potentially different exit outcomes. In our analysis of almost 11,000 U.S. VC-backed entrepreneurial firms, we show that although a VC-backed start-up is more likely to be acquired when its VCs have more co-investment experience with one another, it is both more likely to go public and go bankrupt when its VCs have less past co-investment experience. We find that our results are robust to a sample selection correction as well as an inverse probability treatment weight specification. We discuss the implications of our results for work on entrepreneurial firm strategy, organizational learning, and the performance tradeoffs associated with inter-organizational network structures for the firms embedded within them.