Social capital at venture capital firms and their financial performance:\n Evidence from China

This paper studies the extent to which social capital drives performance in\nthe Chinese venture capital market and explores the trend toward VC syndication\nin China. First, we propose a hybrid model based on syndicated social networks\nand the latent-variable model, which describes the social capital at venture\ncapital firms and builds relationships between social capital and performance\nat VC firms. Then, we build three hypotheses about the relationships and test\nthe hypotheses using our proposed model. Some numerical simulations are given\nto support the test results. Finally, we show that the correlations between\nsocial capital and financial performance at venture capital firms are weak in\nChina and find that China's venture capital firms lack mature social capital\nlinks.\n