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Angel Investing: A Literature Review

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  • Edelman, Linda F.
  • Manolova, Tatiana S.
  • Brush, Candida G.

Abstract

Even though scholars have amassed a large body of research on angel investors, few systematic and comprehensive reviews are available. The purpose of this monograph is to review this literature and then to offer suggestions for future investigation. To that end, we compiled a set of journal articles on angel investing. We start with Wetzel’s (1983) seminal article describing the characteristics of angel investors and end with the work published more recently. In total, we have 152 articles that we review. For parsimony, we chose to focus our review only refereed journal articles, thereby excluding conference proceedings, books and book chapters, industry reports, and dissertations. This implies that there is additional work that has been done on the topic of angel investing that is not covered by our monograph. For this, we offer our apologies. However, we did include studies using data from the Global Entrepreneurship Monitor (GEM) because these capture early stage financing globally. GEM defines angel investment a little differently than we do in the monograph, in that in GEM they include early stage family and friends money as angel investment. This is likely due to the international nature of the GEM data collection and the lack of a robust angel investment community internationally. In the final chapter, we have included a table that breaks out the GEM studies, to better represent the data.

Suggested Citation

  • Edelman, Linda F. & Manolova, Tatiana S. & Brush, Candida G., 2017. "Angel Investing: A Literature Review," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 13(4-5), pages 265-439, September.
    • Handle: RePEc:now:fntent:0300000051
    DOI: 10.1561/0300000051
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    References listed on IDEAS

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    1. Mark Van Osnabrugge, 1998. "Do Serial and Non-Serial Investors Behave Differently?: An Empirical and Theoretical Analysis," Entrepreneurship Theory and Practice, , vol. 22(4), pages 23-42, July.
    2. Charles W. Wessner, 2002. "Entrepreneurial finance and the New Economy," Venture Capital, Taylor & Francis Journals, vol. 4(4), pages 349-355, October.
    3. Robert Wiltbank, 2005. "Investment practices and outcomesof informal venture investors," Venture Capital, Taylor & Francis Journals, vol. 7(4), pages 343-357, August.
    4. Mark Van Osnabrugge, 2000. "A comparison of business angel and venture capitalist investment procedures: An agency theory-based analysis," Venture Capital, Taylor & Francis Journals, vol. 2(2), pages 91-109, April.
    5. Rolf Visser & Roger Williams, 2001. "Prospecting for Gold: How Dutch informal investors appraise small businesses in trouble," Venture Capital, Taylor & Francis Journals, vol. 3(1), pages 1-24, January.
    6. László Szerb & Siri Terjesen & Gábor Rappai, 2007. "Seeding new ventures -- green thumbs and fertile fields: Individual and environmental drivers of informal investment," Venture Capital, Taylor & Francis Journals, vol. 9(4), pages 257-284, April.
    7. Wetzel, William Jr., 1987. "The informal venture capital market: Aspects of scale and market efficiency," Journal of Business Venturing, Elsevier, vol. 2(4), pages 299-313.
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    Citations

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    Cited by:

    1. Fei Qin & Tomasz Mickiewicz & Saul Estrin, 2022. "Homophily and peer influence in early-stage new venture informal investment," Small Business Economics, Springer, vol. 59(1), pages 93-116, June.
    2. Gina Santos & Carla Susana Marques & João J. Ferreira, 2018. "A look back over the past 40 years of female entrepreneurship: mapping knowledge networks," Scientometrics, Springer;Akadémiai Kiadó, vol. 115(2), pages 953-987, May.
    3. Julien Salin & Nadine Levratto, 2020. "Are business angel-backed companies truly different? a comparative analysis of the financial structure," EconomiX Working Papers 2020-5, University of Paris Nanterre, EconomiX.
    4. Anil Arya & Brian Mittendorf & Thomas Pfeiffer, 2021. "Incentive Provision in Light of Expertise and Operational Involvement of Angel Investors," Production and Operations Management, Production and Operations Management Society, vol. 30(9), pages 2890-2909, September.
    5. Magnus Henrekson & Tino Sanandaji, 2018. "Stock option taxation: a missing piece in European innovation policy?," Small Business Economics, Springer, vol. 51(2), pages 411-424, August.
    6. 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).
    7. Tiago Botelho & Richard Harrison & Colin Mason, 2021. "Business angel exits: a theory of planned behaviour perspective," Small Business Economics, Springer, vol. 57(1), pages 583-602, June.
    8. Douglas Cumming & Minjie Zhang, 2019. "Angel investors around the world," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(5), pages 692-719, July.
    9. 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).
    10. Engineer, Merwan H. & Schure, Paul & Vo, Dan H., 2019. "Hide and seek search: Why angels hide and entrepreneurs seek," Journal of Economic Behavior & Organization, Elsevier, vol. 157(C), pages 523-540.
    11. Harrison, Richard T., 2022. "“Pennies from heaven”? Market failure, circuits of capital and policy support for business angels: The case of cross-border angel investment," Journal of Business Venturing Insights, Elsevier, vol. 17(C).
    12. Monika Wodnicka & Dagmara Skurpel, 2021. "Growth Global Market of E-Commerce Cross Border: The Case of Poland," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 1), pages 1121-1135.
    13. Ferdinando Giglio, 2021. "Women Entrepreneurs and Business Angel: A Difficult Relationship," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 13(11), pages 1-21, November.
    14. Wesley II, Curtis L. & Kong, Dejun Tony & Lubojacky, Connor J. & Kim Saxton, M. & Saxton, Todd, 2022. "Will the startup succeed in your eyes? Venture evaluation of resource providers during entrepreneurs' informational signaling," Journal of Business Venturing, Elsevier, vol. 37(5).

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    More about this item

    Keywords

    Angel investment; Angel networks; Entrepreneurial firms; Micro-angels; Woman investors;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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