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The Consequences of Entrepreneurial Finance: Evidence from Angel Financings

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  • William R. Kerr
  • Josh Lerner
  • Antoinette Schoar

Abstract

This article documents the fact that ventures funded by two successful angel groups experience superior outcomes to rejected ventures: They have improved survival, exits, employment, patenting, Web traffic, and financing. We use strong discontinuities in angel- funding behavior over small changes in their collective interest levels to implement a regression discontinuity approach. We confirm the positive effects for venture operations, with qualitative support for a higher likelihood of successful exits. On the other hand, there is no difference in access to additional financing around the discontinuity. This might suggest that financing is not a central input of angel groups. The Author 2011. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail: journals.permissions@oup.com., Oxford University Press.

Suggested Citation

  • William R. Kerr & Josh Lerner & Antoinette Schoar, 2014. "The Consequences of Entrepreneurial Finance: Evidence from Angel Financings," The Review of Financial Studies, Society for Financial Studies, vol. 27(1), pages 20-55, January.
    • Handle: RePEc:oup:rfinst:v:27:y:2014:i:1:p:20-55
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    File URL: http://hdl.handle.net/10.1093/rfs/hhr098
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