Issues In Angel Investing Research: An Analysis of Data and Returns in the US and Abroad

23 Pages Posted: 15 Sep 2013 Last revised: 19 Feb 2015

See all articles by Michael McDonald

Michael McDonald

Fairfield University - Charles F. Dolan School of Business

Ramon P. DeGennaro

University of Tennessee, Knoxville - Department of Finance

Date Written: February 2, 2015

Abstract

Research on angel investors is sparse because data are sparse. Most comprehensive studies of angel investors have focused on the US and UK. In these studies, 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 examine the literature and find that the calculations of reported results are vague. Most researchers do not explicitly report if their estimates are equal-weighted or value-weighted, nor do they say whether the results are weighted by the duration of the investment. We show that the unit of analysis – investment, project, or angel – affects interpretations. These limitations leave the current literature incomplete.

Keywords: Angel finance, small firms, investments

JEL Classification: G24, G19, G10

Suggested Citation

McDonald, Michael and DeGennaro, Ramon P., Issues In Angel Investing Research: An Analysis of Data and Returns in the US and Abroad (February 2, 2015). Available at SSRN: https://ssrn.com/abstract=2325720 or http://dx.doi.org/10.2139/ssrn.2325720

Michael McDonald (Contact Author)

Fairfield University - Charles F. Dolan School of Business ( email )

N. Benson Road
Fairfield, CT 06824
United States

Ramon P. DeGennaro

University of Tennessee, Knoxville - Department of Finance ( email )

423 Stokely Management Center
Knoxville, TN 37996
United States
865-974-1726 (Phone)
865-974-1716 (Fax)

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