Promoting cross-border investing by business angels in the European Union

Abstract

The supply of entrepreneurial finance in Europe is constrained by the geographical fragmentation of its capital market. The need to facilitate more cross-border investing by business angelsthe main source of early stage financeis recognized. A study of business angels on the island of Ireland identifies three constraints on cross-border investing:(1) lack of information on cross-border investment opportunities; (2) the preference of angels to invest locally; and (3) tax incentives that are only available for investments in the angel's own country. Increasing cross-border investment requires mechanisms that build relationships between business angels in different countries. KEYWORDS entrepreneurial finance; business angels; investment decision-making; cross-border investing; tax incentives; angel groups JEL F21, F36, L26, L53 HISTORY

Challenges of business angels: does career matter?

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