More from these Authors

• Case | HBS Case Collection | October 2019

  NewView Capital and Venture Capital Secondaries

  Ramana Nanda, Shai Benjamin Bernstein and Allison Ciechanover

  While still a general partner at Silicon Valley-based New Enterprise Associates (NEA), Ravi Viswanathan considered the challenges presented by evolving market dynamics in the venture capital space. Startups were staying private longer, which led to limited partners thirsty for liquidity and venture capital funds managing overloaded portfolios. Viswanathan and the senior leaders of NEA orchestrated the purchase of 31 NEA unrealized portfolio companies by the newly created $1.35 billion NewView Capital spinout that he would head. This secondary transaction provided liquidity to NEA’s limited partners and reallocated NEA partners’ time to shepherd other portfolio companies, while at the same time allowing NewView Capital to reap gains from future exits from a portfolio of diverse, high-quality growth stage technology companies. Now, as he prepares to raise Fund II, Viswanathan acknowledges that the unique circumstances that enabled the launch of Fund I would not be replicable, and he must consider  alternative strategies to pursue next. Should he continue to focus on secondary transactions, focus on direct investments, or some combination of the two?

  Keywords: Venture Capital; Capital Markets; Private Equity;

  Citation:

  Nanda, Ramana, Shai Benjamin Bernstein, and Allison Ciechanover. "NewView Capital and Venture Capital Secondaries." Harvard Business School Case 820-038, October 2019.  View Details

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• Teaching Plan | HBS Case Collection | September 2019

  Financial Inclusion at Omidyar Network

  Vikram S. Gandhi and James Barnett

  Teaching Note for HBS No. 218-069.

  Citation:

  Gandhi, Vikram S., and James Barnett. "Financial Inclusion at Omidyar Network." Harvard Business School Teaching Plan 320-018, September 2019.  View Details

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• Chapter | The Oxford Handbook of Entrepreneurship and Collaboration | 2019

  Coordination Frictions in Venture Capital Syndicates

  Ramana Nanda and Matthew Rhodes-Kropf

  An extensive literature on venture capital has studied asymmetric information and agency problems between investors and entrepreneurs, examining how separating entrepreneurs from the investor can create frictions that might inhibit the funding of good projects. It has largely abstracted away from the fact that a startup typically does not have just one investor but rather several VCs that come together in a syndicate to finance a venture. In this chapter, we therefore argue for an expansion of the standard perspective to also include frictions within VC syndicates. Put differently, what are the frictions that arise from the fact that there is not just one investor for each venture but several investors with different incentives, objectives, and cash flow rights who nevertheless need to collaborate to help make the venture a success? We outline the ways in which these coordination frictions manifest themselves, describe the underlying drivers, and document several contractual solutions used by VCs to mitigate their effects. We believe that this broader perspective provides several promising avenues for future research.

  Keywords: Syndication; frictions; Venture Capital; Networks; Entrepreneurship;

  Citation:

  Nanda, Ramana, and Matthew Rhodes-Kropf. "Coordination Frictions in Venture Capital Syndicates." In The Oxford Handbook of Entrepreneurship and Collaboration, edited by Jeffrey J. Reuer, Sharon Matusik, and Jessica F. Jones. New York: Oxford University Press, 2019.  View Details

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