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Business performance and angels presence: a fresh look from France 2008–2011

Author

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  • Luc Tessier

    (UPEM - Université Paris-Est Marne-la-Vallée)

  • Cécile Fonrouge

    (UPEM - Université Paris-Est Marne-la-Vallée)

Abstract

Business angels enjoy a strong reputation for being more efficient than other investors among policy makers, practitioners, and scholars. However, due to the limited availability of specific financial data, previous research has barely assessed the impact of angels on companies' performance. This paper seeks to bridge this gap by providing evidence from a unique dataset made up of 432 angel-backed French companies which are compared to two control groups, one randomly selected and another one consisting of similar enterprises. This double comparison process enables us to purge our analysis of structural effect and to demonstrate the importance of the methodology in generating the sample. Indeed, the results we obtain significantly differ depending on the control group. Our results show that the positive influence of angels depends on the condition of the comparison. The set of BA-backed companies is more likely to exhibit superior performance when it is compared to a random sample whereas the companies' performance is either identical or worse when it is compared to a sample composed of k-nearest neighbors. In addition, using a quantile regression technique makes it possible to differentiate the effect of business angels based on the distribution of the value of the growth rate.

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  • Luc Tessier & Cécile Fonrouge, 2017. "Business performance and angels presence: a fresh look from France 2008–2011," Post-Print hal-01555254, HAL.
    • Handle: RePEc:hal:journl:hal-01555254
    Note: View the original document on HAL open archive server: https://hal.science/hal-01555254
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    References listed on IDEAS

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    1. Alperovych, Yan & Hübner, Georges & Lobet, Fabrice, 2015. "How does governmental versus private venture capital backing affect a firm's efficiency? Evidence from Belgium," Journal of Business Venturing, Elsevier, vol. 30(4), pages 508-525.
    2. Shamim Ahmed & Brian Cozzarin, 2009. "Start-up funding sources and biotechnology firm growth," Applied Economics Letters, Taylor & Francis Journals, vol. 16(13), pages 1341-1345.
    3. Avdeitchikova, Sofia & Landström, Hans, 2014. "The Economic Significance of Business Angels - Towards Comparable Indicators," Ratio Working Papers 248, The Ratio Institute.
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    Cited by:

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    2. Bonini, Stefano & Capizzi, Vincenzo & Zocchi, Paola, 2019. "The performance of angel-backed companies," Journal of Banking & Finance, Elsevier, vol. 100(C), pages 328-345.

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    business angels;

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