 Amplifying angels: Evidence from the INVEST programMarius Berger and Sandra Gottschalk Journal of Business Venturing, 2025, vol. 40, issue 1 Abstract: This paper shows that angel investor grants encourage new investors to enter the risk finance market, where they syndicate investments with other investors. We argue that this results from the high cost of information acquisition for new investors. New investors bring additional capital into the market but provide little managerial support. However, as these investors join syndicates, ventures can raise larger financing amounts without compromising managerial support. Taken together, these factors positively affect the performance of entrepreneurial ventures. To test our hypotheses, we consider the case of Germany, where the federal government has introduced an investment grant for angel investors. Combining applicant data from the subsidy program with company and ownership information on the quasi-universe of German companies and a large-scale company-level panel survey covering over 900 angel-financed ventures to empirically assess our hypotheses provides strong support for our predictions. Keywords: Investment grant; Angel financing; Syndication; Managerial support (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jbvent:v:40:y:2025:i:1:s0883902624000788 DOI: 10.1016/j.jbusvent.2024.106456 Access Statistics for this article Journal of Business Venturing is currently edited by S. Venkataraman More articles in Journal of Business Venturing from Elsevier |
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