Angel Network Affiliation and Business Angels’ Investment Practices

47 Pages Posted: 22 Oct 2016 Last revised: 20 Dec 2017

See all articles by Stefano Bonini

Stefano Bonini

Stevens Institute of Technology - School of Business

Vincenzo Capizzi

University of Piemonte Orientale - Department of Economics and Business Studies; SDA Bocconi School of Management

Mario Valletta

University of Piemonte Orientale - Department of Economics and Business Studies

Paola Zocchi

University of Piemonte Orientale - Department of Economics and Business Studies

Date Written: December 19, 2017

Abstract

This paper provides preliminary evidence on the effects of membership in an angel network (BAN) on the investment choices of business angels. Using a novel dataset containing qualitative and quantitative information on 810 angel or angel-group backed investments on 619 companies by 330 unique business angels from 2008 to 2014, we show that BAN membership generates valuable information, networking, monitoring and risk reduction effects, which ultimately affect the amount of personal capital committed by each angel investor and their equity stake in the investee companies. These results extend our knowledge of the investing behavior and characteristics of business angels, a relatively opaque funding source that is rapidly gaining prominence in support of new ventures and the development of the global economy.

Keywords: business angels, business angel networks, venture capital

JEL Classification: G24, G32, M13

Suggested Citation

Bonini, Stefano and Capizzi, Vincenzo and Valletta, Mario and Zocchi, Paola, Angel Network Affiliation and Business Angels’ Investment Practices (December 19, 2017). Journal of Corporate Finance, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2856478 or http://dx.doi.org/10.2139/ssrn.2856478

Stefano Bonini (Contact Author)

Stevens Institute of Technology - School of Business ( email )

Hoboken, NJ 07030
United States

Vincenzo Capizzi

University of Piemonte Orientale - Department of Economics and Business Studies ( email )

Via E. Perrone, 18
Novara, NO 28100
Italy
+390321375438 (Phone)
+390321375405 (Fax)

HOME PAGE: http://www.uniupo.it

SDA Bocconi School of Management ( email )

Via F. Bocconi, 8
Milan, Milan 20136
Italy
+390258365966 (Phone)
+390258366893 (Fax)

HOME PAGE: http://www.sdabocconi.it

Mario Valletta

University of Piemonte Orientale - Department of Economics and Business Studies ( email )

via E. Perrone 18
Novara, Novara 28100
Italy

Paola Zocchi

University of Piemonte Orientale - Department of Economics and Business Studies ( email )

via E. Perrone 18
Novara, Novara 28100
Italy

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