Download This PaperSeed-Stage Success and Growth of Angel Networks
Paris December 2016 Finance Meeting EUROFIDAI - AFFI
29th Annual Conference on Financial Economics & Accounting 2018
59 Pages Posted: 5 Jun 2016 Last revised: 2 Aug 2018
Date Written: July 1, 2018
Abstract
Using unique hand-collected data, we show that syndication is widespread in the angel investment market, even among seed-stage startups. Individual angels that demonstrate seed-stage success experience an increase in the quantity, quality, and geographic spread of their co-investment connections relative to unsuccessful peers, and are rewarded with more deal flow. These results are stronger for less-established angels and when the seed-stage success indicates skill rather than luck. Success also begets more success, making it more likely that the angel's other portfolio companies receive follow-on financing, especially from VC firms.
Keywords: Angel Investors; Networks; Start-ups; Reputation
JEL Classification: G24; L14; L26; M13
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