Angel financing is defined as ‘‘[i]nformal venture capital-equity investments and non-collateral forms of lending made by private individuals
...using their own
money, directly in unquoted companies in which they have no family connection PricewaterhouseCoopers/National Venture Capital Association MoneyTree Report, 2004. Thomson Reuters; https://www.pwcmoneytree.com’’ (Harrison and Mason 1999). It plays a crucial role in financing growth-oriented ventures by filling the gap between informal family and friends and more formal institutional (venture capital) investment (Harrison and Mason 1999; Van Osnabrugge and Robinson 2000). However, comparatively little is known about the angel market, due in large part to its invisible nature (Mason and Harrison 2008).
Given the private nature of angel investment data, getting exact investment numbers is difficult. Recent research in the US estimates the amount of capital provided by angels is nearly equal to the money provided by venture capital firms (Sohl 2005). Worldwide, researchers estimate that angel investors provide up to 11 times the amount of funding provided by venture capitalists (Reynolds, Bygrave, and Autio 2003). Specifically, the Center for Venture Research estimates that US *Corresponding author. Email: email@example.com
Vol. 14, Nos. 2–3, April–July 2012, 111–129
ISSN 1369-1066 print/ISSN 1464-5343 online
2012 Taylor & Francis
angels invested $20.1 billion in 611,900 companies in 2010 (http://wsbe.unh.edu/cvr), while the National Venture Capital Association reports that venture capitalists invested $21.8 billion in 3277 companies (http://www.nvca.org). Further, the NVCA suggests that the impact of angel financing from groups and individuals overall is approximately $100 billion in the United States. Given that angels often focus much of their investment in early stage ventures, researchers estimate that in...
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