Misconduct Risks, Legal Enforcement, and Venture Capital Networks

Douglas Cumming*, Ali Mohammadi, Simona Zambelli

*Corresponding author af dette arbejde

Publikation: Bidrag til tidsskriftTidsskriftartikelForskningpeer review


This study investigates the differing role of enforcement on the formation of venture capital (VC) syndication networks. We conjecture that public enforcement, with strong investigative powers against any syndicate member, discourages the formation of denser syndication networks due to misconduct risk by a member. By contrast, private enforcement, with strong disclosure and liability standards, enables denser syndication networks, through clear liability rules, standardized securities contracts, and cost sharing amongst syndicate members. Our VC data from 31 countries show a negative impact of public enforcement on VC networks, and partially support the positive impact of private enforcement depending on cultural conditions.
TidsskriftEuropean Financial Management
Antal sider59
StatusUdgivet - 6 dec. 2021

Bibliografisk note

Epub ahead of print. Published online: 06 December 2021.


  • Culture
  • Legal enforcement
  • Networks
  • Syndication
  • Venture capital