Seed-Stage Success and Growth of Angel Networks
59 Pages Posted: 5 Jun 2016 Last revised: 21 Jan 2019
Date Written: July 1, 2018
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
Suggested Citation: Suggested Citation