Navigating the Start-Up Financing Funding Gap: Comparing Business Angels and Crowdfunding

Stefano Bonini, Vincenzo Capizzi () and Francesca Tenca
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Stefano Bonini: Stevens Institute of Technology
Vincenzo Capizzi: Università del Piemonte Orientale
Francesca Tenca: Università del Piemonte Orientale

A chapter in Leading and Managing in the Digital Era, 2024, pp 77-88 from Springer

Abstract: Abstract This study presents empirical comparisons of fundraising outcomes for entrepreneurial ventures supported by business angels and crowd investors. Utilizing a comprehensive multi-year dataset derived from repeated annual surveys within the business angel (BA) and equity crowdfunding (ECF) markets in Italy, our findings reveal that, despite investing in comparable start-ups, ECF-backed ventures secure lower capital amounts than BA-backed ones. Moreover, ECF-backed start-ups acquire a smaller proportion of capital. These outcomes imply that equity crowdfunding and business angels are not perfect substitutes but rather function as different financial channels for inherently heterogeneous start-ups characterized by distinct funding requirements.

Date: 2024
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DOI: 10.1007/978-3-031-65782-5_6

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