A Study On Cooperation Strategy Choice Of Venture Capital Syndicators

In recent years, the venture capital industry has witnessed explosive development. Due to its many advantages such as resource complementation, revenue sharing and risk sharing, venture capital syndication has become major financial force to promote venture capital industry’s growing and technical innovation. However, the venture capital syndication unites venture capitalists with different background, different values, and different interest demands. Precisely because of such differences, the cooperation between venture capital syndicators always falls into prisoner’s dilemma because of the conflict between individual interests and interests of the other members or investment itself, which lead to a high speed disintegration. Given the business practice background that venture capital syndication has a high speed growth combining with a high failure rate, and concerning that different syndication way may have an impact on investment relationship, it has become urgent and necessary to analyze cooperation strategy choice among venture capital syndicators in different circumstances.Therefore, via making a distinction between "the functional role" and "the strategic role" of venture capital syndication, the reason why "strong-strong syndication", "strong-weak syndication" and "weak-weak syndication" happen and the features of each have been explicated in detail by this discovery. On this basis, the cooperation strategy choice of the venture capital syndicators in different ways has been studied. On the one hand, by describing dynamics game processes of the equal venture capital syndicators’ cooperation strategy choice under the situations such as one-time collaboration, frequent cooperation, and under trigger conditions, it focuses on the overflowing value and its impact on control right’ distribution, and presents relevant suggestions in the end. One the other hand, for cooperation strategy choice of unequal venture capital syndicators, it analyzes how altruistic punishment and reputation mechanism influence evolutionary strategy, by constructing evolutionary game model based on punishment. Meanwhile it validates the conclusions and propose appropriate counter-measures via numerical simulation analysis. At last, along with the case studies of I Venture Investment Corporation, this study has been interpreted as evidence that conclusions above can guide to the maintenance of cooperation relationship among venture capital syndicators.