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Co-investment networks of business angels and the performance of their start-up investments

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  • Jochen Christian Werth
  • Patrick Boeert

Abstract

The venture capital literature has established the positive impact of co-investment networks on the performance of start-up investments. In early stages, however, often angel financing is the primary source of external equity. Using a novel in-depth dataset of US high technology start-ups we investigate the effects of business angel networks. Start-ups of better connected angel investors are more likely to receive subsequent funding by venture capitalists and business angels more often exit successfully. Thereby, angel investors seem to rely on their direct contacts, whereas their network position and possibility to act as information brokers plays a far smaller role.

Suggested Citation

  • Jochen Christian Werth & Patrick Boeert, 2013. "Co-investment networks of business angels and the performance of their start-up investments," International Journal of Entrepreneurial Venturing, Inderscience Enterprises Ltd, vol. 5(3), pages 240-256.
    • Handle: RePEc:ids:ijeven:v:5:y:2013:i:3:p:240-256
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    Citations

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    Cited by:

    1. Marra, Alessandro & Antonelli, Paola & Pozzi, Cesare, 2017. "Emerging green-tech specializations and clusters – A network analysis on technological innovation at the metropolitan level," Renewable and Sustainable Energy Reviews, Elsevier, vol. 67(C), pages 1037-1046.
    2. de Lange, Deborah & Valliere, Dave, 2020. "Investor preferences between the sharing economy and incumbent firms," Journal of Business Research, Elsevier, vol. 116(C), pages 37-47.
    3. Carolin Bock & Christian Hackober, 2020. "Unicorns—what drives multibillion-dollar valuations?," Business Research, Springer;German Academic Association for Business Research, vol. 13(3), pages 949-984, November.
    4. Bonini, Stefano & Capizzi, Vincenzo & Zocchi, Paola, 2019. "The performance of angel-backed companies," Journal of Banking & Finance, Elsevier, vol. 100(C), pages 328-345.
    5. Gvetadze, Salome & Pal, Kristian & Torfs, Wouter, 2020. "The business angel portfolio under the European Angels Fund: An empirical analysis," EIF Working Paper Series 2020/62, European Investment Fund (EIF).
    6. Johannes Wallmeroth & Peter Wirtz & Alexander Peter Groh, 2017. "Institutional Seed Financing, Angel Financing, and Crowdfunding of Entrepreneurial Ventures: A Literature Review," Working Papers hal-01527999, HAL.
    7. Ghezzi, Antonio & Gastaldi, Luca & Lettieri, Emanuele & Martini, Antonella & Corso, Mariano, 2016. "A role for startups in unleashing the disruptive power of social media," International Journal of Information Management, Elsevier, vol. 36(6), pages 1152-1159.
    8. Marra, Alessandro & Antonelli, Paola & Dell’Anna, Luca & Pozzi, Cesare, 2015. "A network analysis using metadata to investigate innovation in clean-tech – Implications for energy policy," Energy Policy, Elsevier, vol. 86(C), pages 17-26.
    9. Deborah de Lange, 2023. "Sustainable Transportation for the Climate: How Do Transportation Firms Engage in Cooperative Public-Private Partnerships?," Sustainability, MDPI, vol. 15(11), pages 1-21, May.
    10. Bhussar, Manjot S. & Sexton, Jennifer C. & Zorn, Michelle L. & Song, Yue, 2022. "High-tech acquisitions: How acquisition pace, venture maturity, and founder retention influence firm innovation," Journal of Business Research, Elsevier, vol. 142(C), pages 620-635.
    11. Aleksandar Bradic, 2012. "The Role of Social Feedback in Financing of Technology Ventures," Papers 1301.2196, arXiv.org.
    12. Butticè, Vincenzo & Croce, Annalisa & Ughetto, Elisa, 2021. "Network dynamics in business angel group investment decisions," Journal of Corporate Finance, Elsevier, vol. 66(C).
    13. Wallmeroth, Johannes & Wirtz, Peter & Groh, Alexander Peter, 2018. "Venture Capital, Angel Financing, and Crowdfunding of Entrepreneurial Ventures: A Literature Review," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 14(1), pages 1-129, February.
    14. Christian Hackober & Carolin Bock, 2021. "Which investors’ characteristics are beneficial for initial coin offerings? Evidence from blockchain technology-based firms," Journal of Business Economics, Springer, vol. 91(8), pages 1085-1124, October.
    15. Antretter, Torben & Sirén, Charlotta & Grichnik, Dietmar & Wincent, Joakim, 2020. "Should business angels diversify their investment portfolios to achieve higher performance? The role of knowledge access through co-investment networks," Journal of Business Venturing, Elsevier, vol. 35(5).
    16. Jörg Weking & Michael Mandalenakis & Andreas Hein & Sebastian Hermes & Markus Böhm & Helmut Krcmar, 2020. "The impact of blockchain technology on business models – a taxonomy and archetypal patterns," Electronic Markets, Springer;IIM University of St. Gallen, vol. 30(2), pages 285-305, June.

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