The economic significance of business angels: toward comparable indicators

Sofia Avdeitchikova and Hans Landström

Chapter 3 in Handbook of Research on Business Angels, 2016, pp 53-75 from Edward Elgar Publishing

Abstract: In the chapter the authors revisit one of the original topics in business angel research: to measure the scope of the business angel market and evaluate its impact on the economy, especially the financial contributions of business angels at the macro (market) level. This is an issue that has considerable policy relevance. Most policy initiatives to support business angel activities have been introduced without any strong empirical justification nor evidence to inform on the appropriateness of different types of policy measures. In this chapter, the authors summarize our knowledge about the size of the business angel market in different countries. The authors then turn their attention from the size of the market to its ‘significance’; in other words, shifting from a concern with measuring the size of the market to a concern with the relative importance of business angels for funding new and growing ventures in the economy. The authors propose two sets of indicators to evaluate the significance of the business angel market – one that focuses on the supply perspective, that is, the relative importance of business angel finance compared to other sources, and the other that focuses on the demand perspective, that is, the extent to which business angel finance is available in relation to the demand for capital in the small and medium-sized entrepreneur sector.

Keywords: Business and Management; Economics and Finance (search for similar items in EconPapers)
Date: 2016
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