Abstract: On the basis of the practice of multilateral alliances in Chinese venture capital industry, this paper explored the effect of prior co-investment ties density among a group of VC firms on the formation of multilateral alliance for these VC firms with different contextual conditions on group-level. There are some conclusions:firstly, prior tie density has a positive impact on the formation of multilateral alliance; secondly, the impact will be stronger when the knowledge heterogeneity or tie fault-line among potential VC firms is larger;thirdly, reputation heterogeneity or status fault-line doesn't positively affect the prior tie density, but it does have a positive effect on the formation of multilateral alliance, tie fault-lines have a positive impact on the formation of multilateral alliance.