Business angels as smart investors: a systematic review of the evidence

Business angels are regarded as ‘smart’ investors who make added value contributions to their investee businesses that go beyond their financial investments. Most studies of the value added process provide empirical descriptions of the hands-on support provided by business angels. Consequently, a more comprehensive and theoretical overview of the process is lacking and theoretical progress remains slow. In the chapter the author provides a review and synthesis of the available research evidence on the hands-on involvement of business angels after they have made their investment. The analysis is based on a framework that comprises four interrelated dimensions of the value added process: behaviour, context, reception and impact. This results in three main themes that provide insights into the process of adding value. The first theme addresses the involvement of business angels in the ventures in which they invest and how this involvement translates into a set of potential value adding benefits. The second theme addresses how and to what extent the set of potential benefits that portfolio ventures receive may translate into benefits in the venture development process. The third theme addresses how situational contingencies may influence the value added of business angels.