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Co-Investment Networks of Business Angels and the Performance of Their Start-Up Investments

International Journal of Entrepreneurial Venturing, V5 N3 2013

25 Pages Posted: 1 Jan 2012 Last revised: 27 Sep 2014

Jochen Christian Werth

Goethe University Frankfurt

Patrick Böert

Independent

Date Written: December 31, 2011

Abstract

The venture capital literature has established the positive impact of coinvestment networks on the performance of start-up investments. In early stages, however, often angel financing is the primary source of external equity. Using a novel in-depth data set of U.S. high technology start-ups we investigate the effects of business angel networks. Start-ups of better connected angel investors are more likely to receive subsequent funding by venture capitalists and business angels more often exit successfully. Thereby, angel investors seem to rely on their direct contacts, whereas their network position and possibility to act as information brokers plays a far lesser role.

Keywords: business angel, start-up, venture capital, networks, social capital, entrepreneurship

JEL Classification: A14, C23, G24, M13

Suggested Citation

Werth, Jochen Christian and Böert, Patrick, Co-Investment Networks of Business Angels and the Performance of Their Start-Up Investments (December 31, 2011). International Journal of Entrepreneurial Venturing, V5 N3 2013. Available at SSRN: https://ssrn.com/abstract=1977970 or http://dx.doi.org/10.2139/ssrn.1977970

Jochen Christian Werth (Contact Author)

Goethe University Frankfurt ( email )

Grüneburgplatz 1
Frankfurt am Main, 60323
Germany

Patrick Böert

Independent ( email )

No Address Available

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