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Stairway to heaven? rethinking angel investment policy and practice

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  • Harrison, Richard T.
  • Bock, Adam J.
  • Gregson, Geoff

Abstract

Angel investing has grown globally across economies, accompanied by growth in both academic and policymaking interest. In this paper, we critically analyse the current state of knowledge about the process and impact of angel investment. We use a series of stylised facts to highlight key trends as well as misperceptions about those trends. These include the rise of formal and ad hoc angel groups, the efficiency of early stage risk capital markets, the complex interaction between angel and institutional venture capital, and policymaking to address perceived capital market failures. We review the emerging literature on angel investment returns and draw on a new simulation-based analysis of tax incentives to challenge the rationale for government intervention in angel investing.

Suggested Citation

  • Harrison, Richard T. & Bock, Adam J. & Gregson, Geoff, 2020. "Stairway to heaven? rethinking angel investment policy and practice," Journal of Business Venturing Insights, Elsevier, vol. 14(C).
    • Handle: RePEc:eee:jobuve:v:14:y:2020:i:c:s2352673420300366
    DOI: 10.1016/j.jbvi.2020.e00180
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    Cited by:

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    2. Fernandez, Viviana, 2024. "Micro-angel investments of men and women: The role of institutions," Research in International Business and Finance, Elsevier, vol. 70(PB).
    3. Solodoha, Eliran & Rosenzweig, Stav & Harel, Shai, 2023. "Incentivizing angels to invest in start-ups: Evidence from a natural experiment," Research Policy, Elsevier, vol. 52(1).
    4. Harrison, Richard T., 2022. "“Pennies from heaven”? Market failure, circuits of capital and policy support for business angels: The case of cross-border angel investment," Journal of Business Venturing Insights, Elsevier, vol. 17(C).
    5. HONJO Yuji & IKEUCHI Kenta & NAKAMURA Hiroki, 2022. "Does risk aversion affect individuals’ actions and interests in angel investing? Empirical evidence from Japan," Discussion papers 22040, Research Institute of Economy, Trade and Industry (RIETI).
    6. Maran, Raluca, 2022. "Improving MSMEs’ access to start-up financing in ASEAN countries," MPRA Paper 114501, University Library of Munich, Germany.

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