What Drives the Returns of Business Angels’ Investments? An Empirical Analysis of the Italian Informal Venture Capital Market

Global Science and Technology Forum (GSTF), Forthcoming

7 Pages Posted: 19 Sep 2011

See all articles by Vincenzo Capizzi

Vincenzo Capizzi

University of Piemonte Orientale - Department of Economics and Business Studies; SDA Bocconi School of Management

Date Written: August 29, 2011

Abstract

The aim of this study is to analyze the returns of business angels’ investments and their determinants. In this research the author wants to investigate the relationship existing between the performance of business angels investments and a series of explanatory variables widely used in the literature dealing with formal venture capital investments. Thanks to the data provided by surveyed business angels about their exits, it has been possible to build a dataset containing the details of about 90 disinvestments made in Italy during the 2007-2010 time period. This study shows that the most important features business angels look for when financing new firms is the management team, followed by the potential growth of the market. Furthermore, the exit strategy and the industry financed have a significant impact on the IRR of angels’ investments.

Keywords: business angels, informal venture capital, IRR, exit strategies, small firms equity gap

JEL Classification: G24, G32

Suggested Citation

Capizzi, Vincenzo, What Drives the Returns of Business Angels’ Investments? An Empirical Analysis of the Italian Informal Venture Capital Market (August 29, 2011). Global Science and Technology Forum (GSTF), Forthcoming, Available at SSRN: https://ssrn.com/abstract=1930181

Vincenzo Capizzi (Contact Author)

University of Piemonte Orientale - Department of Economics and Business Studies ( email )

Via E. Perrone, 18
Novara, NO 28100
Italy
+390321375438 (Phone)
+390321375405 (Fax)

HOME PAGE: http://www.uniupo.it

SDA Bocconi School of Management ( email )

Via F. Bocconi, 8
Milan, Milan 20136
Italy
+390258365966 (Phone)
+390258366893 (Fax)

HOME PAGE: http://www.sdabocconi.it

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