The Performance of Angel-Backed Companies
64 Pages Posted: 20 Sep 2017 Last revised: 16 Jan 2019
Date Written: December 1, 2018
We provide empirical evidence of the post-investment performance and survivorship profile of angel-backed companies, filling a long-standing gap within the entrepreneurial finance literature. Using a unique database of 111 angel-backed companies that received angel investments between 2008 and 2012 and at least 3 years of post-investment financial data, we develop an innovative performance metric and show that the performance and the probability of survival of investee companies are positively affected by the presence of angel syndicates and the hands-on involvement of business angels, while they are negatively related to the intensity of angel monitoring and the structure of equity provision. Our results are robust to several endogeneity tests and provide insights on the multifaceted contributions of angel investors to the performance and survival of new ventures.
Keywords: business angels, start-ups, angel-backed companies, performance, survival, monitoring, active involvement, co-investments
JEL Classification: G24, G32, M13
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