Syndicated Investing in Private Equity and Venture Capital Industry: Comparing BRICS

Lucas V.B. Martins


Objective. This article characterizes and compares the networks structure formed by Managing Organizations (GOs) Private Equity and Venture Capital (PE&VC) that co-invested in the so called BRICS countries.
Methodology. The methodology used consists of PE or VC transactions with target companies based on the BRICS and involving more than one investor, or “syndicated investing”, between 1992 and 2013.
Findings. The analysis revealed that the social structure in these countries is highly clustered, showing the existence of small worlds in all markets studied, yet under different intensities. This type of structure stimulates the flow of information impacting access to business opportunities. The results suggest that, when dealing with networks of PE&VC investors, one should consider the particularities of BRICS, which are not homogeneous from the perspective of network analysis.
Limitations. This study considers only data from transactions originated and the effect known as BRICS.
Originality/Value. This article offers unique contribution in that it explores Syndicated Investing in understudied markets, employing a methodology that provides new results.


Copyright © 2015 Instituto Brasileiro de Inovação Financeira All rights reserved


Syndicated Investing; Private Equity; Venture Capital; BRICS; Social Networks


Batjargal, B. (2007). Comparative social capital: Networks of entrepreneurs and venture capitalists in China and Russia. Management and Organization Review, 3(3), 397–419. doi: 10.1111/j.1740-8784.2007.00080.x.

Bourdieu, P., & Wacquant, L. J.D. (1992). An invitation to reflexive sociology. Chicago : University of Chicago Press.

Brander, A. J., Amit, R. & Antweiler, W. (2002). Venture capital syndication: Improved venture selection versus the value-added hypothesis. Journal of Economics &Management Strategy, 11(3), 423–452. doi: 10.1111/j.1430- 9134.2002.00423.x.

Burt, R. S. (1992). Structural holes: The social structure of competition. Cambridge : Harvard University Press.

Burt, R. S. (2005). Brokerage and closure: An introduction to social capital. New York : Oxford University Press.

Bygrave,W. (1988). The structure of the investment networks of venture capital firms. Journal of Business Venturing, 3(2), 137–158.

Davis, G. F., Yoo, M. & Baker, W. E. (2003). The small world of the American corporate elite, 1982–2001. Strategic Organization, 1(3), 301–326. doi: 10.1177/14761270030013002.

EMPEA. (2013, July). EMPEA Industry Statistics. Washington : Emerging Markets Private Equity Association (EMPEA).

Ferrary,M., & Granovetter, M. (2009). The role of venture capital firms in Silicon Valley’s complex innovation network. Economy and Society, 38(2), 326–359. doi: 10.1080/03085140902786827.

Freeman, L. C. (1979). Centrality in social networks: Conceptual clarification. Social Networks, 1(3), 215–239. doi: 10.1016/0378-8733(78)90021-7.

Fukuyama, F. (2000). Social capital and civil society (IMF Working Paper No WP/00/74).

Fund, B.R., Pollock, T.G., Baker, T. & Wowak, A. J. (2008). Who’s the New Kid? The process of developing centrality in the venture capital deal networks. In J. A. Baum& T. J. Rowley (Eds.), Network strategy (Advances in Strategic Management, volume 25) (pp. 563–593). Emerald Group Publishing Limited.

Granovetter, M. (1973). The strength of weak ties. American Journal of Sociology, 78(6), 1360–1380.

Groh, A., Liechtenstein, H. & Lieser, K. (2012). The global venture capital and private equity country attractiveness index—2012 annual. IESE Business School, University of Navarra.

Guler, I., & Guillén,M. F. (2010). Home country networks and foreign expansion: Evidence from the venture capital industry. Academy of Management Journal, 53(2), 390–410. doi: 10.5465/AMJ.2010.49389027.

GVcepe, Centro de Estudos em Private Equity e Venture Capital da FGV-EAESP. (2010). Introdução ao private equity e venture capital para empreendedores. Brasília, DF : Agência Brasileira de Desenvolvimento Industrial.

GVcepe, Centro de Estudos em Private Equity e Venture Capital da FGV-EAESP. (2011). A indústria de private equity e venture capital: Segundo censo brasileiro. Brasília, DF : Agência Brasileira de Desenvolvimento Industrial.

Hochberg, Y. V., Ljungqvist, A. & Lu, Y. (2007). Whom you know matters: Venture capital networks and investment performance. The Journal of Finance, LXII(1), 251–302. doi: 10.1111/j.1540-6261.2007.01207.x.

Hochberg, Y. V., Ljungqvist, A. & Lu, Y. (2010). Networking as a barrier to entry and the competitive supply of venture capital. The Journal of Finance, LXV(3), 829–859. doi: 10.1111/j.1540-6261.2010.01554.x.

International Monetary Fund. (2013, April). World Economic Outlook (database). InternationalMonetary Fund. Acessado em 10.10.2014:

Keil, T.,Maula, M. V. J. &Wilson, C. (2010). Unique resources of corporate venture capitalists as a key to entry into rigid venture capital syndication networks. Entrepreneurship Theory & Practice, 34(1), 83–103. doi: 10.1111/j.1540-6520.2009.00366.x.

Knoke, D., & Kuklinski, J. H. (1982). Network analysis. Beverly Hills, California : Sage Publications.

Kogut, B., Urso, P. & Walker, G. (2007). Emergent properties of a new financial market: American venture capital syndication from 1960 to 2005.

Management Science, 53(7), 1181–1198. Lerner, J. (1994). The syndication of venture capital investments. Financial Management, 23(3), 16–27.

Lin, N. (2001). Social capital: A theory of social structure and action. Cambridge : Cambridge University Press.

Merton, R. (1968). Social theory and social structure. Nova York : Free Press.

Newman,M. E. J., Strogatz, S. H. &Watts, D. J. (2001, Jul). Random graphs with arbitrary degree distributions and their applications. Physical Review E, 64(2), 026118:1–17. doi: 10.1103/PhysRevE.64.026118.

Podolny, J. M. (1993). A status-based model of market competition. American Journal of Sociology, 98(4), 829–872.

Podolny, J. M. (1994). Market uncertainty and the social character of the economic exchange. Administrative Science Quarterly, 39(3), 458–483. doi: 10.2307/2393299.

Podolny, J. M. (2001). Networks as the pipes and prisms of the market. American Journal of Sociology, 107(1), 33–60. doi: 10.1086/323038.

Podolny, J.M., & Phillips, D. J. (1996). The dynamics of organizational status. Industrial and Corporate Change, 5(2), 453–471. doi: 10.1093/icc/5.2.453.

Sahlman, W. A. (1990). The structure and governance of venture-capital organizations. Journal of Financial Economics, 27(2), 473–52. doi: 10.1016/0304-405X(90)90065-8.

Scott, J. (2000). Social network analysis: A handbook (2o ed.). London : Sage Publications.

Sorenson, O., & Stuart, T. E. (2001). Syndication networks and the spatial distribution of venture capital investments. American Journal of Sociology, 106(6), 1546–1588. doi: 10.1086/321301.

Sorenson, O., & Stuart, T. E. (2008). Bringing the context back in: Settings and the search for syndicate partners in venture capital investment networks. Administrative Science Quarterly, 53(2), 266–294. doi: 10.2189/asqu.53.2.266.

Sullivan, B.N., & Tang, Y. (2012). Small-world networks, absorptive capacity, and firmperformance: Evidence from the U.S. venture capital industry. International Journal of Strategy ChangeManagement, 4(2), 149–175. doi: 10.1504/IJSCM.2012.046509.

Uzzi, B., & Gillespie, J. (2002). Knowledge spillover in corporate financing networks: Embeddedness an the firm’s debt performance. Strategic Management Journal, 23(7), 595–618. doi: 10.1002/smj.241.

Walker, G. (2008). The rise of ecommerce as an epidemic in the small world of venture capital. In J. A. Baum & T. J. Rowley (Eds.), Network strategy (Advances in Strategic Management, Volume 25) (p. 3-29). Emerald Group Publishing Limited.

Wasserman, S., & Faust, K. (1994). Social network analysis: Methods and applications. Cambridge University Press.

Watts, D. J., & Strogatz, S. (1998). Collective dynamics of “small-world” networks. Nature, 393, 440–442. doi: 10.1038/30918.

Wilson, R. (1968). The theory of syndicates. Econometrica, 36(1), 119–132.



  • There are currently no refbacks.

Copyright (c) 2015 Instituto Brasileiro de Inovação Financeira

License URL: