Business Angel Investment Activity in the Financial Crisis: UK Evidence and Policy Implications

Colin M Mason and Richard T Harrison
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Colin M Mason: Adam Smith Business School, University of Glasgow, Glasgow G12 8QQ, Scotland
Richard T Harrison: University of Edinburgh, Management School, University of Edinburgh, Edinburgh EH8 9JS, Scotland

Environment and Planning C, 2015, vol. 33, issue 1, 43-60

Abstract: The 2008 financial crisis has transformed the financial environment for small and medium-sized enterprises, resulting in significant declines in the availability of bank lending and venture capital. This has prompted government intervention to improve the availability of debt and equity capital. Whereas there are comprehensive statistics on bank lending and venture capital investments, equivalent information on business angel investment activity is lacking. This paper draws upon three sources of evidence on business angel investment activity in the UK—business angel networks, Scottish angel groups, and individual angels—to reveal for the first time how the angel market has fared during the early stage of the financial crisis. While the evidence is not entirely consistent, it is clear that angel investment activity has held up since the onset of the financial crisis. This further emphasises the economic significance of business angels and underlines the need for ongoing government support. Policy options are reviewed.

Keywords: SME finance; financial crisis; business angels; funding escalator; coinvestment (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:envirc:v:33:y:2015:i:1:p:43-60

DOI: 10.1068/c12324b

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