Angel network affiliation and business angels' investment practices

Stefano Bonini, Vincenzo Capizzi, Mario Valletta, Paola Zocchi

Research output: Contribution to journalArticlepeer-review

56 Scopus citations

Abstract

This paper provides preliminary evidence on the effects of membership in a business angel network (BAN) on the investment decisions of the members. Using a novel dataset containing qualitative and quantitative information on 810 angel or angel-group backed investments in 619 companies by 330 unique business angels from 2008 to 2014, we show that BAN membership generates valuable information, networking, monitoring, and risk reduction effects, which ultimately affect the share of personal wealth committed by each angel investor and their equity stake in the targeted company. These results extend our knowledge of the investment behavior and characteristics of business angels, a relatively opaque funding source that is rapidly gaining prominence in support of new ventures and the development of the global economy.

Original languageEnglish
Pages (from-to)592-608
Number of pages17
JournalJournal of Corporate Finance
Volume50
DOIs
StatePublished - Jun 2018

Keywords

  • Business angel networks
  • Business angels
  • Venture capital

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