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Liftoff: When Strong Growth Is Predicted by Angels and Fuelled by Professional Venture Funds

Author

Listed:
  • Peter Wirtz

    (Laboratoire de Recherche Magellan - UJML - Université Jean Moulin - Lyon 3 - Université de Lyon - Institut d'Administration des Entreprises (IAE) - Lyon)

  • Christophe Bonnet

    (GDF - Gestion, Droit et Finance - EESC-GEM Grenoble Ecole de Management)

  • Christophe Haon

    (MKT - Marketing - EESC-GEM Grenoble Ecole de Management)

Abstract

The present research links knowledge about business angels' individual cognitive and behavioral features and about their co-investment practice with professional venture funds in explaining differential rates of growth. We conducted a survey by questionnaire and were able to gather a unique dataset concerning the characteristics, investment practice and growth performance of a sample of 124 business angels having made a total of 222 investments in the south eastern region of France surrounding Grenoble. Our contribution to the literature is twofold: first, to our knowledge, the present study is the first systematic exploration of the investment practice of business angels in the French market for entrepreneurial finance, and thus helps extend our knowledge of angel investing beyond the limits of North America and the United Kingdom. Second, we make a specific contribution to a better understanding of the determinants of growth in ventures funded by business angels. It appears that especially strong growth rates are significantly supported when business angels and professional venture capitalists co-invest simultaneously due to a certain cognitive closeness.

Suggested Citation

  • Peter Wirtz & Christophe Bonnet & Christophe Haon, 2012. "Liftoff: When Strong Growth Is Predicted by Angels and Fuelled by Professional Venture Funds," Grenoble Ecole de Management (Post-Print) halshs-00746157, HAL.
    • Handle: RePEc:hal:gemptp:halshs-00746157
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00746157
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    Cited by:

    1. Cumming, Douglas & Groh, Alexander Peter, 2018. "Entrepreneurial finance: Unifying themes and future directions," Journal of Corporate Finance, Elsevier, vol. 50(C), pages 538-555.
    2. Laurence Cohen & Peter Wirtz, 2022. "Decision-making style in entrepreneurial finance and growth," Small Business Economics, Springer, vol. 59(1), pages 183-210, June.
    3. Christophe Bonnet & Laurence Cohen & Peter Wirtz, 2015. "Angel Cognition and Active Involvement in BAN Governance and Management," Working Papers hal-01182804, HAL.
    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. Peter Wirtz & Christophe Bonnet & Laurence Cohen & Christophe Haon, 2020. "Investing Human Capital: Angel Cognition and Active Involvement in Business Angel Groups," Post-Print halshs-02374570, HAL.
    6. Nadine Levratto & Luc Tessier, 2014. "La croissance des PME est-elle favorisée par les Business Angels ? Une analyse à partir du cas français en 2008 et 2009," Working Papers hal-04141308, HAL.
    7. 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.
    8. Laurence Cohen & Peter Wirtz, 2018. "Caractéristiques des entrepreneurs, finance entrepreneuriale et trajectoires de croissance," Working Papers hal-01723858, HAL.
    9. Peter Wirtz, 2015. "Entrepreneurial Finance and the Creation of Value: Agency Costs vs. Cognitive Value," Post-Print hal-01178314, HAL.
    10. Bonnet, Christophe & Capizzi, Vincenzo & Cohen, Laurence & Petit, Aurelien & Wirtz, Peter, 2022. "What drives the active involvement in business angel groups? The role of angels' decision-making style, investment-specific human capital and motivations," Journal of Corporate Finance, Elsevier, vol. 77(C).
    11. Laurence Cohen & Kirsten Burkhardt, 2019. "Entrepreneurs (novices vs. experts) and investors: Interaction and rationality dynamics (effectual vs. causal) [Entrepreneurs (novice vs. expert) et investisseurs : interactions et dynamique des ra," Post-Print hal-02177388, HAL.
    12. Nadine Levratto & Luc Tessier, 2014. "La croissance des PME est-elle favorisée par les Business Angels ? Une analyse à partir du cas français en 2008 et 2009," EconomiX Working Papers 2014-48, University of Paris Nanterre, EconomiX.

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