Abstract

http://ssrn.com/abstract=1024186
 
 

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Are Angels Different? An Analysis of Early Venture Financing


Brent D. Goldfarb


University of Maryland - Robert H. Smith School of Business

Gerard Hoberg


University of Maryland - Department of Finance

David Kirsch


University of Maryland

Alexander J. Triantis


University of Maryland - Robert H. Smith School of Business

November 4, 2013

Robert H. Smith School Research Paper No. RHS 06-072

Abstract:     
We examine the role of angel investors in early venture financing using a unique sample of 182 Series A preferred stock rounds. Our sample includes deals in which angels invest alone, VCs invest alone, and where both investor types co-invest. We find that deals with more angel investors have weaker cash flow and control rights, and experience longer times to resolution. Among larger deals, those financed by VCs alone are most likely to experience successful liquidation. Our overall results support the conclusion that angel objectives likely align more with entrepreneurs than VCs, and that outcomes may be linked to conflicts of interest.

Number of Pages in PDF File: 54

Keywords: Venture Capital, Angel Investors, Entrepreneurship, Control Rights, Term Sheets

JEL Classification: G20, G24, G32

working papers series


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Date posted: March 19, 2008 ; Last revised: November 4, 2013

Suggested Citation

Goldfarb, Brent D. and Hoberg, Gerard and Kirsch, David and Triantis, Alexander J., Are Angels Different? An Analysis of Early Venture Financing (November 4, 2013). Robert H. Smith School Research Paper No. RHS 06-072. Available at SSRN: http://ssrn.com/abstract=1024186 or http://dx.doi.org/10.2139/ssrn.1024186

Contact Information

Brent D. Goldfarb (Contact Author)
University of Maryland - Robert H. Smith School of Business ( email )
College Park, MD 20742-1815
United States
301-405-9672 (Phone)
301-314-8787 (Fax)
Gerard Hoberg
University of Maryland - Department of Finance ( email )
Robert H. Smith School of Business
Van Munching Hall
College Park, MD 20742
United States
HOME PAGE: http://www.rhsmith.umd.edu/finance/faculty/hoberg.aspx
David Kirsch
University of Maryland ( email )
College Park, MD 20742
United States
Alexander J. Triantis
University of Maryland - Robert H. Smith School of Business ( email )
Department of Finance
College Park, MD 20742-1815
United States
301-405-2246 (Phone)
301-314-9157 (Fax)
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