Liftoff: When Strong Growth is Predicted by Angels and Fuelled by Professional Venture Funds
25 Pages Posted: 11 Jun 2012
Date Written: June 11, 2012
The present research links business angels’ cognitive and behavioral features and co-investment practice with professional venture funds in explaining differential rates of growth. Using a questionnaire survey we were able to gather a unique dataset concerning the characteristics, investment practice and growth performance of a sample of 124 business angels having made a total of 222 investments in the south eastern region of France surrounding Grenoble. Our contribution to the literature is twofold: first, this study is the first systematic exploration of the practice of business angels in the French market for entrepreneurial finance, and thus extends our knowledge of angel investing beyond the limits of North America and the United Kingdom. Second, we make a contribution to a better understanding of the determinants of growth in ventures funded by business angels. Strong growth rates are significantly supported when business angels and professional venture capitalists co-invest simultaneously due to a certain cognitive closeness.
Keywords: business angels, venture capitalists, cognition, growth
JEL Classification: G24, M13
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