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6 J. Mgmt. & Sustainability 21 (2016)
Venture Capital Networks in Australia: Emerging Structure and Behavioral Implications

handle is hein.journals/jms6 and id is 240 raw text is: Journal of Management and Sustainability; Vol. 6, No. 2; 2016 ISSN 1925-4725 E-ISSN 1925-4733 Published by Canadian Center of Science and Education Venture Capital Networks in Australia: Emerging Structure and Behavioural Implications Asif Siddiqui1, Dora Marinova & Amzad Hossain' 1 Curtin University Sustainability Policy (CUSP) Institute, Curtin University, Perth, Australia Correspondence: Dora Marinova, CUSP, Curtin University, GPO Box U1987, Perth., WA 6845, Australia. Tel: 61-8-9266-9033. E-mail: d.marinova ttcurtin.edu.au Received: February 5, 2016 Accepted: February 28, 2016 Online Published: April 27, 2016 doi: 10.5539/jms.v6n2p21 URL: http://dx.doi.org/10.5539/j ms.v6n2p21 Abstract Inter-firm collaboration and networking have significantly increased in the context of technological innovation, changing the business environment and contributing to rapid and global integration. Being at the heart of technological innovation and commercialization, the venture capital (VC) industry has adopted inter-firm alliance as a common practice on a global scale. The most common form of collaboration in the industry is investment syndication between firms which eventually leads to a network of syndication. Understanding drivers of syndication and its financial implications is no longer enough. The nature of the inter-firm collaboration networks can be influenced by location and industry characteristics, and in turn they can also influence the industry practices and change. This study investigates the emerging structure of the VC networks in technology ventures in Australia in order to capture key features of the Australian VC market. Using graph theory the paper presents syndication network graphs and analyses their structural properties. The connectivity and density analysis shows further scope for facilitating the flow of information and resources across the VC industry. Behavioural implications of the networks on the industry practices and viability are also analysed and questions raised about the VC industry's contribution to supporting and mainsteaming sustainable technologies. Keywords: syndication network, inter-firm collaboration, industry culture, sustainability 1. Introduction There is a growing evidence around the world of inter-firm networks across manufacturing, service and financial industries, especially in the venture capital (VC) segment of the financial industry (Sydow et al., 1997; Hochberg, Ljungqvist, & Lu, 2007; Hopp & Reider, 2011; Terjesen, Patel, Fiet, & D'Souza, 2013). Collaboration among competing firms within the industry has emerged as a source of information and resource accumulation as well as a competitive advantage (Lado, Boyd, & Hanlon, 1997; Dyer & Singh, 1998; Baraldi, Gressetvold, & Harrison, 2012; Gu & Lu, 2014). Since the 1980s, this has been particularly accelerated by the rapid technological innovation and commercialization on a global scale which has changed the market frontiers and nature of competition. It is therefore not surprising that researchers have taken a serious interest in the nature and implications of inter-firm collaboration. However, the nature of inter-firm collaboration is influenced by industry characteristics, such as core business, resources requirement, investment risk, market competition as well as the industry's location which provides the economic, legal and social context for its activities. The VC industry has not only been at the centre of the commercialization of innovation and productivity growth around the world but also at the heart of entrepreneurial finance and financial innovation. Investing in the equities of young and promising technology ventures, managing and growing them to eventually divest the equity holdings at a higher price is the core business of the VC firms which requires industry expertise and also involves a high risk of failure. In response to the unique requirements of the industry's core business, the VC firms have developed their own pattern of inter-firm alliance and collaboration which usually takes the form of equity syndication. Consequently, this results in the formation of syndication networks connecting the firms through the syndicated ventures. The structure and characteristics of the network then represent the industry as well as the macroeconomic context within which it is located. Against this background, we investigate the emerging pattern of syndication networks in Australia since the commencement of the country's VC industry in 1984 when the Management & Investment Companies (MIC)

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