VC syndicates mitigate moral hazard, boost value addition in financing.
The article explores why venture capitalists team up when investing in startups. It suggests that working together helps VCs provide better support to entrepreneurs. The researchers created a model to explain how VCs decide to work alone or in groups. They found that forming groups can reduce the risk of VCs not doing their job properly. The study also looked at how these groups change over time. The results from real-world data support the model's ideas.