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An Assessment Of Government Funding Of Business Angel Networks: A Regional Study

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  • V. COLLEWAERT

    ()

  • S. MANIGART

    ()

  • R. AERNOUDT

Abstract

In this paper we evaluate whether government intervention through the public funding of business angel networks is warranted. Based on a regional study of four BANs, we find that these subsidies reach their goals in terms of contribution to economic development and reducing financing and information problems entrepreneurial companies face. However, they are partly based on the wrong assumptions as these companies are not (yet) value creating. Therefore, we advise caution in using the market failure argument as grounds for government intervention in the informal risk capital market.

Suggested Citation

  • V. Collewaert & S. Manigart & R. Aernoudt, 2007. "An Assessment Of Government Funding Of Business Angel Networks: A Regional Study," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 07/455, Ghent University, Faculty of Economics and Business Administration.
  • Handle: RePEc:rug:rugwps:07/455
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    References listed on IDEAS

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    3. Josh Lerner, 2002. "When Bureaucrats Meet Entrepreneurs: The Design of Effective "Public Venture Capital" Programmes," Economic Journal, Royal Economic Society, vol. 112(477), pages 73-84, February.
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    6. Lockett, Andy & Murray, Gordon & Wright, Mike, 2002. "Do UK venture capitalists still have a bias against investment in new technology firms," Research Policy, Elsevier, vol. 31(6), pages 1009-1030, August.
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    Cited by:

    1. José Bilau & Soumodip Sarkar, 2016. "Financing innovative start-ups in Portuguese context: what is the role of business angels networks?," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 7(4), pages 920-934, December.

    More about this item

    Keywords

    risk capital; business angels; policy; economic development; market failure;

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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