Business Angels Research in Entrepreneurial Finance: A Literature Review and a Research Agenda

Abstract

Since the seminal works of Wetzel, research on business angels (BAs) has emerged as a new and promising research field. This review analyses the current knowledge on BAs, identifying the main contents and outcomes. We also provide a bibliometric analysis to illustrate the evolution of the research field, the level of dispersion of the scientific community, the main outlets for publication and the different methodological approaches adopted. Through the analysis of backward and forward citations, we depict the current knowledge base on which BA research is grounded and whether it has any impact on other research fields.

There must be an angel? Local financial markets, business angels and the financing of innovative start-ups

“…Likewise VC investments (e.g. Tyebjee and Bruno, 1984), BAs' decision to invest in start-ups is found to be strongly dependent on founders' characteristics and in particular on the human capital endowment of entrepreneurs (Tenca et al, 2018). Especially in high-tech and knowledge intensive sectors, human capital is the primary asset for the success of newly created ventures (Cooper and Bruno, 1977;Colombo and Grilli, 2005;Grilli, 2014) and failure to control for such important characteristic may lead to biased results in our context.…”

“…Furthermore, since female entrepreneurs appear more reluctant than male entrepreneurs in seeking angel financing (Becker-Blease and Sohl, 2007), we also control for gender (see Tenca et al, 2018 for a discussion) with the covariate Male Founders, which is the percentage of male co-founders.…”

“…American start-ups like PayPal and LinkedIn, but also (to a lesser extent) European entrepreneurial ventures like Body Shop or Innocent Smoothies, have benefited in their early stages from investments of BAs and have ultimately become rather successful companies in their field. Accordingly, BAs have increasingly attracted the attention of scholars in entrepreneurial finance (see the recent literature survey by Tenca et al, 2018). Broadly speaking, this literature highlights the positive role that BAs can perform in the financial eco-system, while at the same time, many areas still remain fairly unexplored or are just presumed and need further corroboration.…”

Business angel exits: a theory of planned behaviour perspective

“…DeTienne 2010; Wennberg et al 2010; DeTienne and Cardon 2012; Wennberg and DeTienne 2014) has taken an entrepreneur-centric perspective and ignored investor exits. And, as recent reviews of the business angel literature indicate, there have been few studies of the exit stage in the investment process (Edelman et al 2017;Wallmeroth et al 2018;Tenca et al 2018), with these studies largely focused on investment returns (Mason and Harrison 2002;Wiltbank and Boeker 2007;Wiltbank 2009;Wiltbank et al 2009;McDonald and DeGennaro 2016;Gregson et al 2017). However, the process by which business angels achieve exits-specifically, the extent to which they were the outcome of a planned strategy or an opportunistic response to circumstances-represents an important question which we cannot answer at present.…”

Regional and spatial issues in the financing of small and medium-sized enterprises and new ventures

“…The clustering of investment opportunities and specialist investors in 'core regions' more than in 'peripheral regions' reinforces credit constraints dynamics for SMEs operating in spatially remote regions. Much can be said of BA and VC activity, which is unequally distributed across cities, regions and nations (Mason & Pierrakis, 2013;Tenca, Croce, & Ughetto, 2018). Likewise, new research on crowdfunding suggests that there are unique spatial dimensions that merit further investigation (Mollick, 2014).…”