Open business models and venture capital finance

We investigate the differences in venture capital (VC) governance of investee firms with Open Business Models, specifically Open Source Software (OSS), versus closed business models. Due to OSS's pronounced complexity and uncertainty, we conjecture that VC-backed OSS firms are more frequently staged and syndicated. We present robust empirical evidence from the United States that OSS ventures have more financing rounds and are more likely to be syndicated, and mixed evidence that OSS ventures have a larger number of syndicated investors.