Business Angels: The Smartest Money for Starters? Plea for a Renewed Policy Focus on Business Angels

14 Pages Posted: 16 Aug 2005

See all articles by Rudy Aernoudt

Rudy Aernoudt

Flemish Minister of Economy, Enterprise, Research, Innovation and External Trade

Abstract

This paper develops different ways to stimulate business angel investment. Coping with the second equity gap can mainly happen by stimulating syndication and by setting up co-investment schemes. Investor readiness, corporate orientation, business angel networks, business angel academies and the integrated finance concept can be considered as key concepts in coping with the information asymmetry problem. Stimulating simultaneously these different aspects might be the best way to provide starters and young enterprises with smart money. Given the untapped potential of business angels, government initiatives in the field might realize a high value for public money.

Keywords: Business angels, Information asymmetry, Investment-readiness, Pecking order, Small firm equity gap, Smart money

JEL Classification: G24, G38

Suggested Citation

Aernoudt, Rudy, Business Angels: The Smartest Money for Starters? Plea for a Renewed Policy Focus on Business Angels. International Journal of Business, Vol. 10, No. 3, 2005, Available at SSRN: https://ssrn.com/abstract=778426

Rudy Aernoudt (Contact Author)

Flemish Minister of Economy, Enterprise, Research, Innovation and External Trade ( email )

Brussels, B-1000
Belgium

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