Seed-Stage Success and Growth of Angel Networks

59 Pages Posted: 5 Jun 2016 Last revised: 21 Jan 2019

See all articles by Buvaneshwaran Venugopal

Buvaneshwaran Venugopal

University of Central Florida - College of Business Administration

Vijay Yerramilli

University of Houston, C. T. Bauer College of Business

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

Suggested Citation

Venugopal, Buvaneshwaran and Yerramilli, Vijay, Seed-Stage Success and Growth of Angel Networks (July 1, 2018). Paris December 2016 Finance Meeting EUROFIDAI - AFFI; 29th Australasian Finance and Banking Conference 2016; 29th Annual Conference on Financial Economics & Accounting 2018. Available at SSRN: https://ssrn.com/abstract=2789117 or http://dx.doi.org/10.2139/ssrn.2789117

Buvaneshwaran Venugopal (Contact Author)

University of Central Florida - College of Business Administration ( email )

PO Box 161400
Orlando, FL 32816
United States

Vijay Yerramilli

University of Houston, C. T. Bauer College of Business ( email )

Houston, TX 77204
United States
713-743-2516 (Phone)

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