IDEAS home Printed from https://ideas.repec.org/a/kap/sbusec/v15y2000i2p137-48.html
   My bibliography  Save this article

The Size of the Informal Venture Capital Market in the United Kingdom

Author

Listed:
  • Mason, Colin M
  • Harrison, Richard T

Abstract

Despite its undoubted importance to the financing of entrepreneurial ventures, there are few reliable measures of the size of the informal venture capital market. This paper reviews three methods used to generate such estimates--market-based approaches, firm-based approaches and the capture-recapture approach--and develops an alternative approach that is based on scaling up from the visible segment of this market represented by business angel networks. This methodology is applied to provide the first formal estimate of the size of the informal venture capital market in the United Kingdom. Informal venture capital investment is shown to broadly equate to the amount of institutional venture capital provided to start-up and early stage ventures. Reflecting the smaller average size of investments in the informal venture capital market, however, eight times as many businesses raise finance from business angels than from institutional venture capital funds. Copyright 2000 by Kluwer Academic Publishers

Suggested Citation

  • Mason, Colin M & Harrison, Richard T, 2000. "The Size of the Informal Venture Capital Market in the United Kingdom," Small Business Economics, Springer, vol. 15(2), pages 137-148, September.
    • Handle: RePEc:kap:sbusec:v:15:y:2000:i:2:p:137-48
    as

    Download full text from publisher

    File URL: http://journals.kluweronline.com/issn/0921-898X/contents
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bonini, Stefano & Capizzi, Vincenzo & Valletta, Mario & Zocchi, Paola, 2018. "Angel network affiliation and business angels' investment practices," Journal of Corporate Finance, Elsevier, vol. 50(C), pages 592-608.
    2. Yuen Ping Ho & Poh Kam Wong, 2005. "Availability of Financing, Regulatory Business Costs and National Entrepreneurial Propensity," Industrial Organization 0504025, University Library of Munich, Germany, revised 03 Aug 2005.
    3. Maunula, Mari, 2006. "The Perceived Value-added of Venture Capital Investors. Evidence from Finnish Biotechnology Industry," Discussion Papers 1030, The Research Institute of the Finnish Economy.
    4. Solodoha, Eliran & Rosenzweig, Stav & Harel, Shai, 2023. "Incentivizing angels to invest in start-ups: Evidence from a natural experiment," Research Policy, Elsevier, vol. 52(1).
    5. Cox, Kevin C. & Lortie, Jason & Stewart, Steven A., 2017. "When to pray to the angels for funding: The seasonality of angel investing in new ventures," Journal of Business Venturing Insights, Elsevier, vol. 7(C), pages 68-76.
    6. Bonini, Stefano & Capizzi, Vincenzo & Zocchi, Paola, 2019. "The performance of angel-backed companies," Journal of Banking & Finance, Elsevier, vol. 100(C), pages 328-345.
    7. Yuen-Ping Ho & Poh-Kam Wong, 2007. "Financing, Regulatory Costs and Entrepreneurial Propensity," Small Business Economics, Springer, vol. 28(2), pages 187-204, March.
    8. Dafna Schwartz & Raphael Bar-El, 2006. "Venture Investments in Israel - A Regional Perspective Dafna Schwartz and Raphael Bar-El Ben-Gurion University, School of Management, Israel," ERSA conference papers ersa06p868, European Regional Science Association.
    9. Cavallo, Angelo & Ghezzi, Antonio & Dell'Era, Claudio & Pellizzoni, Elena, 2019. "Fostering digital entrepreneurship from startup to scaleup: The role of venture capital funds and angel groups," Technological Forecasting and Social Change, Elsevier, vol. 145(C), pages 24-35.
    10. Honjo, Yuji & Nakamura, Hiroki, 2020. "The link between entrepreneurship and informal investment: An international comparison," Japan and the World Economy, Elsevier, vol. 54(C).
    11. Chun-Yueh Lin & Yi-Hsien Wang, 2021. "Evaluating the Optimal External Equity Financing Strategy and Critical Factors for the Startup of Lending Company in Taiwan: An Application of Expert Network Decision Model," Mathematics, MDPI, vol. 9(18), pages 1-15, September.
    12. Andrew Burke & André Stel & Chantal Hartog & Abdel Ichou, 2014. "What determines the level of informal venture finance investment? Market clearing forces and gender effects," Small Business Economics, Springer, vol. 42(3), pages 467-484, March.
    13. 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).
    14. David Grundy & Carolina Ohmer, 2016. "German crowd-investing platforms: Literature review and survey," Cogent Business & Management, Taylor & Francis Journals, vol. 3(1), pages 1138849-113, December.
    15. Sander Wennekers & Jolanda Hessels & Chantal Hartog, 2009. "Global Entrepreneurship Monitor 2008 The Netherlands," Scales Research Reports A200914, EIM Business and Policy Research.
    16. Ali-Yrkkö, Jyrki & Pajarinen, Mika & Ylhäinen, Ilkka, 2019. "Business Angel Investment, Public Innovation Funding and Firm Growth," ETLA Reports 97, The Research Institute of the Finnish Economy.
    17. Harrison, Richard T. & Bock, Adam J. & Gregson, Geoff, 2020. "Stairway to heaven? rethinking angel investment policy and practice," Journal of Business Venturing Insights, Elsevier, vol. 14(C).
    18. Richard T. Harrison & Colin M. Mason, 2007. "Does Gender Matter? Women Business Angels and the Supply of Entrepreneurial Finance," Entrepreneurship Theory and Practice, , vol. 31(3), pages 445-472, May.
    19. HONJO Yuji & NAKAMURA Hiroki, 2019. "The Link between Entrepreneurial Activities and Angel Investment: An international comparison," Discussion papers 19017, Research Institute of Economy, Trade and Industry (RIETI).
    20. Hadi S. Alhorr & Curt B. Moore & G. Tyge Payne, 2008. "The Impact of Economic Integration on Cross–Border Venture Capital Investments: Evidence from the European Union," Entrepreneurship Theory and Practice, , vol. 32(5), pages 897-917, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:sbusec:v:15:y:2000:i:2:p:137-48. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.