Evolving ventures and venture capital syndicate resource diversity

Abstract We examine how lead venture capital (VC) investors adjust VC syndicate resource diversity to meet ventures’ evolving developmental needs. As ventures transition from early to later stages, lead VCs tend to assemble more resource-diverse syndicates to support expanding resource requirements. However, greater diversity also increases coordination costs of managing the syndicate. We argue that lead VCs balance these competing considerations, such that syndicate composition depends on attributes of both the lead VC and the syndicate that shape this trade-off. We test our conjectures using a sample of US ventures receiving VC funding between 1990 and 2019. Our findings offer an evolutionary perspective on VC syndicate composition across venture life stages.