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Navigating the Start-Up Financing Funding Gap: Comparing Business Angels and Crowdfunding

In: Leading and Managing in the Digital Era

Author

Listed:
  • Stefano Bonini

    (Stevens Institute of Technology)

  • Vincenzo Capizzi

    (Università del Piemonte Orientale)

  • Francesca Tenca

    (Università del Piemonte Orientale)

Abstract

This study presents empirical comparisons of fundraising outcomes for entrepreneurial ventures supported by business angels and crowd investors. Utilizing a comprehensive multi-year dataset derived from repeated annual surveys within the business angel (BA) and equity crowdfunding (ECF) markets in Italy, our findings reveal that, despite investing in comparable start-ups, ECF-backed ventures secure lower capital amounts than BA-backed ones. Moreover, ECF-backed start-ups acquire a smaller proportion of capital. These outcomes imply that equity crowdfunding and business angels are not perfect substitutes but rather function as different financial channels for inherently heterogeneous start-ups characterized by distinct funding requirements.

Suggested Citation

  • Stefano Bonini & Vincenzo Capizzi & Francesca Tenca, 2024. "Navigating the Start-Up Financing Funding Gap: Comparing Business Angels and Crowdfunding," Lecture Notes in Information Systems and Organization, in: Gregory Prastacos & Nancy Pouloudi (ed.), Leading and Managing in the Digital Era, pages 77-88, Springer.
    • Handle: RePEc:spr:lnichp:978-3-031-65782-5_6
    DOI: 10.1007/978-3-031-65782-5_6
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