The Globalization of Angel Investments: Evidence across Countries

51 Pages Posted: 22 Dec 2015 Last revised: 6 Mar 2016

See all articles by Josh Lerner

Josh Lerner

Harvard Business School - Finance Unit; Harvard University - Entrepreneurial Management Unit; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI); Harvard University - Private Capital Research Institute

Antoinette Schoar

Massachusetts Institute of Technology (MIT) - Sloan School of Management; National Bureau of Economic Research (NBER)

Stanislav Sokolinski

Michigan State University - Department of Finance

Karen E. Wilson

GV Partners; Organization for Economic Co-Operation and Development (OECD)

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Date Written: February 28, 2016

Abstract

This paper examines investments made by 13 angel groups across 21 countries. We compare applicants just above and below the funding cutoff and find that these angel investors have a positive impact on the growth, performance, and survival of firms as well as their follow-on fundraising. The positive impact of angel financing is independent of the level of venture activity and entrepreneur-friendliness in the country. However, we find that the development stage and maturity of startups that apply for angel funding (and those that are ultimately funded) is inversely correlated with the entrepreneurship-friendliness of the country, which may reflect self-censoring by very early-stage firms that do not expect to receive funding in these environments.

Suggested Citation

Lerner, Josh and Schoar, Antoinette and Sokolinski, Stanislav and Wilson, Karen E., The Globalization of Angel Investments: Evidence across Countries (February 28, 2016). Harvard Business School Entrepreneurial Management Working Paper No. 16-072, Harvard Business School Finance Working Paper No. 16-072, Available at SSRN: https://ssrn.com/abstract=2706546 or http://dx.doi.org/10.2139/ssrn.2706546

Josh Lerner (Contact Author)

Harvard Business School - Finance Unit ( email )

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Harvard University - Entrepreneurial Management Unit

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Antoinette Schoar

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

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Stanislav Sokolinski

Michigan State University - Department of Finance ( email )

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Karen E. Wilson

GV Partners ( email )

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Organization for Economic Co-Operation and Development (OECD) ( email )

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