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Should government support business angel networks? The tale of Danish business angels network


  • Jesper Lindgaard Christensen


Policies promoting informal venture capital generally and business angel networks (BANs) in particular have gained increased attention in recent years. As a consequence, BANs are now widespread across Europe. However, there continues to be a debate whether BANs should be supported with public money. This article discusses the possible rationale for governments to support BANs and what criteria to apply when evaluating such networks. The article is based on an in-depth observation study of the whole life cycle of a national BAN -- the Danish Business Angel Network (DBAN) -- and a comparison with a similar national angel network in Wales. Results show that applying traditional evaluation criteria for assessing BANs may provide only a partial picture. DBAN was squeezed between political pressures, impatience and lack of understanding of the broader benefits of an angel network. It was therefore left to die. This contrasts Wales where Xenos was shown more patience and persistence and it was rapidly integrated into the investment community. The implication is that lack of consistent funding, even in economic downswings, may erase the position and awareness of BANs in the capital markets. When governments consider whether to provide continuing support to BANs they should evaluate not only their immediate effectiveness but also whether BANs should be considered a part of the general small business support infrastructure.

Suggested Citation

  • Jesper Lindgaard Christensen, 2011. "Should government support business angel networks? The tale of Danish business angels network," Venture Capital, Taylor & Francis Journals, vol. 13(4), pages 337-356, April.
  • Handle: RePEc:taf:veecee:v:13:y:2011:i:4:p:337-356
    DOI: 10.1080/13691066.2011.642513

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    References listed on IDEAS

    1. Rudy Aernoudt, 1999. "European policy towards venture capital: Myth or reality?," Venture Capital, Taylor & Francis Journals, vol. 1(1), pages 47-58, January.
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    Cited by:

    1. Peter Wirtz & Christophe Bonnet & Laurence Cohen, 2015. "Angel Cognition and Active Involvement in BAN Governance and Management," Working paper serie RMT - Grenoble Ecole de Management hal-01182804, HAL.
    2. Peter Wirtz & Christophe Bonnet & Laurence Cohen, 2015. "Angel Cognition and Active Involvement in BAN Governance and Management," Working Papers hal-01182804, HAL.
    3. Hoyos Iruarrizaga, Jon & Saiz Santos, María, 2013. "The informal investment context: specific issues concerned with business angels," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 26, pages 179-198.
    4. Li, Changhong & Shi, Yulin & Wu, Cong & Wu, Zhenyu & Zheng, Li, 2016. "Policies of promoting entrepreneurship and Angel Investment: Evidence from China," Emerging Markets Review, Elsevier, vol. 29(C), pages 154-167.

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