Angel cap[italist

2009

Angel investors are an important source of funding for entrepreneurs that bridge the gap between the so-called friends and family rounds and the venture capital rounds of financing. Angel investors are generally high-net-worth individuals who typically invest in companies at a seed or start-up stage. Given the nature of these investments, failure rates are high, thus giving

This paper examines the factors that drive individuals to become angel investors.

SSRN Electronic Journal, 2016

We document that the choice between disintermediated individual angel investments and intermediated private equity and venture capital investments depends on legal, economic, and cultural differences. We find evidence of this using PitchBook's comprehensive data on more than 5,000 angel and 80,000 private equity and venture capital investments in 96 countries from 1977 to 2012. The data further indicate that investee firms funded by angels are less likely to successfully exit through either an IPO or an acquisition. These findings are robust to propensity score matching methods, as well as to clustering standard errors and excluding U.S. observations, among other approaches.

Journal of Banking & Finance, 1998

The market for angel capital ± where individuals provide risk capital directly to small, private, often start-up ®rms ± operates in almost total obscurity. Very little is known about the market's size, scope, the type of ®rms that raise angel capital, and the types of individuals that provide it. In this paper I present evidence on the angel market gathered from my ®eld research which has involved interviews with more than a dozen angel investors in the Dallas/Fort Worth area. The angel market appears to be a very heterogeneous and localized market. With that quali®cation in mind, I present some common characteristics of the angels I interviewed, and how they select and monitor their investments. I pay particular attention to how they address adverse selection and moral hazard problems. I compare their behavior with venture capital limited partnerships in the more formal market for venture capital.

2011

Research on angel investors is sparse because data are sparse. Definitions of angel investors and estimates of returns on angel investments vary dramatically. What can we make of this wide range of reported returns? We survey the literature and find that the calculations of reported results are quite vague. Most researchers do not explicitly report whether their estimates are equal-weighted or valueweighted, for example, nor do they say whether the results are weighted by the duration of the investment.

SSRN Electronic Journal, 2014

There has been a recurrent debate about the relative importance of age and experience in high-tech entrepreneurship where the uncertainty not to say non-existence of certain markets and products may render knowledge less critical than in established industries. Are the famous entrepreneurs in their early and mid-twenties exceptions? Some recent studies claim that the average age of entrepreneurs is closer to forty years old. We revisited the topic and analyzed not only the age of founders but also their roles when the company reached success and the links with geography, fields of business, value creation and venture capital.

European Financial Management, 2013

Angel investors invest billions of dollars in thousands of entrepreneurial projects annually, far more than the number of firms that obtain venture capital. Previous research has calculated realized internal rates of return on angel investments, but empirical estimates of expected returns have not yet been produced. Although calculations of realized returns are a valuable contribution, expected returns, rather than realized returns, drive investment decisions. We use a new data set and statistical framework to produce the first empirical estimates of expected returns on angel investments. We also allow for the time value of money, which previous research has typically ignored. Our sample of 588 investments spans the 1972-2007 period and contains 419 exited investments. We conduct extensive tests to explore potential bias in the data set and conclude that the evidence in favor of bias is tenuous at best. Our results suggest that angel investors in groups can expect to earn returns that are on the order of returns on venture capital investments. Estimated net returns are about 70 percent in excess of the riskless rate per year for an average holding period of 3.67 years. This estimate is reasonable compared to Cochrane's (2005) estimate of 59 percent per year for venture capital investments, which tend to be in lower-variance, later-stage projects. Returns have a large variance and are heavily skewed, with many losses and occasional extraordinarily high returns.

SSRN Electronic Journal, 2000

Understanding an entrepreneurial finance ecosystem requires an appreciation of how different investors interact with each other. Angels and venture capitalists constitute two of the most important equity investors for start-ups. In this paper we develop and empirically test some hypotheses about the interactions between these two investor types. The focus is on the dynamics of the funding path of start-up companies. We distinguish complements and substitutes relationships between investor types, and between investor-versus company-led interactions. Using a unique database from British Columbia, Canada, we provide evidence that angel and venture capital funding are dynamic substitutes. An instrumental variable approach based on available tax credits for investors shows that the substitutes relationship is company-led. The dynamic substitute pattern applies across the performance range for companies. It is more pronounced for casual angels and angel funds than for serial angels.

The famed poet served in the army during the Second Punic War. Only Silius Italicus (Pun. 12.394), a late and untrustworthy source, assigns him the rank of centurion, as signified by the vitis, in a poetic description of events of 215 (Latiaeque superbum vitis adornabat dextram decus). If Silius reflects a genuine fact, then Ennius served as a centurion in an allied cohort, as he did not obtain Roman citizenship until 184 BC. Casali notes that the reference to the vitis not only evokes a centurion's rank, but also Dionysian allusions. While the notion of Ennius as centurion is attractive, it may well be poetic license.