We often discuss entrepreneurial ecosystems through the founders: who came up with the good idea, which team grew fastest, which startup became a unicorn. Yet investors, alongside entrepreneurs, also shape the strategies of early-stage ventures. When studying investors, however, we usually examine them individually: a fund’s investment thesis, an angel investor’s experience, or the strategic objectives of a corporate venture capital fund. But how do investors interact when they invest, or consider investing, in the same funding round? When they back a venture together, do they truly become partners, or are they also potential competitors in subsequent rounds and over the longer term? A recently published paper—my first with O. Kemal Kırtaç, a longtime friend and, for some time now, my doctoral student, drawing on his ongoing dissertation research—addresses precisely this question.
Uncertainty is high in the early stages of entrepreneurship. The product may not yet be established, market validation may be incomplete, the team may still be fragile, and the scalability of the technology may remain uncertain. Under these conditions, working together makes sense for everyone. Syndication—the participation of multiple investors in the same round—makes it possible to share risk, broaden the pool of knowledge, and improve the quality of decisions. One investor can draw on another’s industry expertise, an angel investor can bring a close relationship with the founding team, and a corporate investor can provide market access. Joint due diligence becomes a mechanism for collective learning.
As the venture grows, the game changes. As its value increases, questions about equity stakes, valuation, board representation, and the timing of an exit can become contentious. Investors who took risks together at an early stage may subsequently have different time horizons and expectations of returns. Cooperation and competition thus emerge as two phases of the same relationship among startup investors.
This matters even more in developing entrepreneurial ecosystems such as Türkiye’s. Trust is a resource almost as scarce as capital in ecosystems like ours. Without trust among investors, large, high-quality investment rounds are difficult to sustain. In this context, syndication is more than a financial instrument: it is a form of coordination that helps build the ecosystem. Investors who back ventures together learn from one another, develop shared expectations, and spread legal and managerial practices.
Of course, we should not romanticize relationships among startup investors. Not every co-investment is a genuine partnership, and not every syndicated investment benefits the venture receiving the funds. Too many investors can slow decision-making. Differences in status may constrain the founder’s room for maneuver. Large investors may overshadow smaller ones, while corporate investors may eclipse the priorities of angels and other financial investors.
For founders, raising investment is really about designing an architecture of relationships. It is not enough to look at the size of the cheque or the investor’s reputation. Founders also need to understand the investors’ prior relationships with one another, their decision-making styles, behavior in later funding rounds, responses during crises, and exit expectations. The wrong mix of investors can push a promising business idea into a governance crisis.
Competition among investors cannot, of course, be eliminated entirely. But it is possible to anticipate when and how it will arise. Investors who establish trust early, keep information-sharing open, and discuss expectations from the outset can make the inevitable tensions of later stages more manageable.
Entrepreneurship policy, therefore, should not be limited to creating more funds and offering more incentives. It should also strengthen the ecosystem’s capacity for coordination among investors. Co-investment mechanisms, transparent contractual standards, and reliable exit markets matter for this reason. Entrepreneurial ecosystems grow through the quality of their relationships, not through lone heroes or legendary investors.
Competition in venture capital is intensifying, and capital is becoming more selective. Major opportunities are emerging in artificial intelligence, deep technology, fintech, and climate technologies, but the need for information and risk management is also growing. Seeing one another only as rivals narrows the ecosystem; seeing one another only as friends conceals real conflicts of interest. In venture capital, friendship and competition sit at the same table. Those who can recognize which is dominant at each stage—and manage the tension throughout investment and scaling—will be better positioned to succeed.
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