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Business Angel Networks and the Development of the Informal Venture Capital Market in the U.K.: Is There Still a Role for the Public Sector?


  • Mason, Colin M
  • Harrison, Richard T


Business angel networks (BANs) provide a channel of communication between private venture capital investors (business angels) and entrepreneurs seeking risk capital. Most operate locally on a not-for-profit basis with their costs underwritten by the public sector. However, the recent establishment of BANs by private sector organisations in the U.K. has led to a questioning of the government's continuing role in the financing of BANs. This paper demonstrates that there are significant differences between public sector and other not-for-profit BANs and private sector, commercially-oriented BANs in terms of the investments that they facilitate. Private sector BANs are primarily involved with larger, later stage deals whereas investments made through not-for-profit BANs are generally smaller, involve start-ups and other early stage businesses and are local. The emergence of private sector BANs has therefore not eliminated the need for public sector support for locally-oriented networks. Copyright 1997 by Kluwer Academic Publishers

Suggested Citation

  • Mason, Colin M & Harrison, Richard T, 1997. "Business Angel Networks and the Development of the Informal Venture Capital Market in the U.K.: Is There Still a Role for the Public Sector?," Small Business Economics, Springer, vol. 9(2), pages 111-123, April.
  • Handle: RePEc:kap:sbusec:v:9:y:1997:i:2:p:111-23

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    References listed on IDEAS

    1. Lucy Chennells & John Van Reenen, 1999. "Has technology hurt less skilled workers? A survey of the micro-econometric evidence," IFS Working Papers W99/27, Institute for Fiscal Studies.
    2. Richard Disney & Jonathan Haskel & Ylva Heden, 2003. "Entry, Exit and Establishment Survival in UK Manufacturing," Journal of Industrial Economics, Wiley Blackwell, vol. 51(1), pages 91-112, March.
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    Cited by:

    1. Bert D'Espallier & Sigrid Vandemaele & Ludo Peeters, 2008. "Investment-Cash Flow Sensitivities or Cash-Cash Flow Sensitivities? An Evaluative Framework for Measures of Financial Constraints," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 35(7-8), pages 943-968.
    2. David Audretsch & Roy Thurik, 0000. "Sources of Growth," Tinbergen Institute Discussion Papers 97-109/3, Tinbergen Institute.
    3. Acs, Zoltan J. & Tarpley Jr., Fred A., 1998. "The angel capital electronic network (ACE-Net)1," Journal of Banking & Finance, Elsevier, vol. 22(6-8), pages 793-797, August.
    4. Jack, Sarah L., 2010. "Approaches to studying networks: Implications and outcomes," Journal of Business Venturing, Elsevier, vol. 25(1), pages 120-137, January.
    5. Gil Avnimelech & Alessandro Rosiello & Morris Teubal, 2010. "Evolutionary interpretation of venture capital policy in Israel, Germany, UK and Scotland," Science and Public Policy, Oxford University Press, vol. 37(2), pages 101-112, March.
    6. Ding, Zhujun & Au, Kevin & Chiang, Flora, 2015. "Social trust and angel investors' decisions: A multilevel analysis across nations," Journal of Business Venturing, Elsevier, vol. 30(2), pages 307-321.
    7. Mark J. Garmaise & Tobias J. Moskowitz, 2002. "Informal Financial Networks: Theory and Evidence," NBER Working Papers 8874, National Bureau of Economic Research, Inc.

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