How does Entrepreneurial Activity Affect the Supply of Business Angels?

André van Stel, Kashifa Suddle, Andrew Burke and Chantal Hartog

No H200813, Scales Research Reports from EIM Business and Policy Research

Abstract: This paper examines the prevalence and the determinants of informal entrepreneurial investment activity (i.e. the 3 FFFs –friends, fools and family– and business angels), using a data set of more than 175,000 individuals – including some 4000 informal investors – in a large number of highly developed countries over the period 2002-2004. We distinguish between micro-level and macro-level determinants. The results uncover a positive virtuous circle where the demand for business angel finance tends to generate its own supply as a result of micro and macro factors. Our results also suggest that higher levels of entrepreneurial activity at the country level increase the probability that venture capital and business angel finance work in tandem with one another as complements rather than substitutes. Overall, the results uncover some important new relationships that perhaps provide some good news that market forces to some extent appear to naturally ameliorate equity gaps faced by entrepreneurs.

Pages: 33 pages
Date: 2008-09-30
New Economics Papers: this item is included in nep-cfn and nep-ent
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.entrepreneurship-sme.eu/pdf-ez/H200813.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eim:papers:h200813

Access Statistics for this paper

More papers in Scales Research Reports from EIM Business and Policy Research Contact information at EDIRC.
Bibliographic data for series maintained by Webmaster EIM ( this e-mail address is bad, please contact ).