Patient capital, characterized by long-term investment, strategic investment, and stable returns, has the potential to guide capital toward the development of new and high-quality productive forces. Venture capital, as the primary vehicle for patient capital, should fully leverage its role as a catalyst for technological innovation and as an accelerator for economic growth. The venture capital cooperation network is a complex structure formed by multiple venture capital institutions through joint investment syndicates, partnerships, and strategic alliances. Within this cooperative network, venture capital institutions occupying structural holes act as intermediaries, obtaining information about investment opportunities through different syndicate partners, thereby playing a crucial role in enhancing individual performance and ensuring the sustainable growth of invested projects. Existing research has increasingly focused on the "structural hole paradox" in inter-organizational cooperation networks. While occupying structural holes can provide organizations with greater access to resources and opportunities, it also leads to more conservative behavioral strategies and poorer cooperative performance. Current studies on the impact of structural holes on venture capital institutions primarily build single-level analytical frameworks, exploring the effects of structural hole positions on venture capital institutions' behavior, the role of structural holes in the selection of venture capital partners, and the impact of structural holes on investment performance. However, there is limited discussion on the existence and mechanisms of the "structural hole paradox" within venture capital cooperation networks. Therefore, this paper, grounded in social network theory and structural hole theory, delves into the manifestations and effects of the "structural hole paradox" within venture capital cooperation networks. It innovatively incorporates this issue into the research scope of structural hole theory and, by clarifying the role of venture capital institutions occupying structural hole positions, lays a foundation for future research on the "structural hole paradox".
The study selects investment and exit events of venture capital institutions in China from 2001 to 2022 as samples. By defining variables and constructing a multiple linear regression model, the hypothesis is tested at both the individual level of venture capital institutions and the syndicate level. It then examines the relationship between the number of structural holes occupied by individual venture capital institutions and their investment performance, as well as the relationship between the overall structural hole level of the venture capital syndicate and syndicate performance.
The research results indicate the following: First, the more structural holes a venture capital institution occupies, the more investment opportunities it acquires; the higher the overall level of structural holes among syndicate members, the greater the total financing raised for syndicate investment projects. Second, the number of structural holes occupied by a venture capital institution positively affects its investment performance, but as the average structural hole level of the syndicate increases, the likelihood of a successful exit for the syndicate decreases. Third, venture capital institutions with a high level of structural holes tend to collaborate with other venture capital institutions that also possess high structural hole levels, but the performance of syndicates formed by such "strong partnerships" is actually worse. Fourth, venture capital institutions with more structural holes tend to invest in early-stage and high-tech industries, which positively mediate investment performance.
This paper integrates social network theory, structural hole theory, and related research findings. By constructing a dual-level network analysis framework, it explores the existence and impact of the "structural hole paradox" in venture capital cooperation networks, enriching the application scenarios and explanatory power of structural hole theory. Unlike previous studies, this study innovatively connects and couples the individual and syndicate levels of venture capital institutions, deepening the theoretical understanding of the "structural hole paradox" and providing empirical support for the complex role of structural holes in multi-level networks. Additionally, the research unveils new mechanisms behind the cooperation strategies and investment behaviors of venture capital institutions, offering new empirical support for the application of structural hole theory in the venture capital field.