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First-round valuation of angel-backed companies: the role of investor human capital


  • Collewaert, V.
  • Manigart,S.

    (Vlerick Leuven Gent Management School)


This paper investigates how angel investors’ human capital affects the valuation of their portfolio companies at initial investment, based on the pre-money valuation of 59 investments in young Belgian companies. We show that entrepreneurs are able to negotiate higher valuations with angel investors who have a business degree, more entrepreneurial experience or previous professional law experience. As such, this result is in contrast with the behavior of venture capital investors. Angel investors with financial experience, however, value their investments lower: their financial background leads them to stress the financial side of the deal more.

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  • Collewaert, V. & Manigart,S., 2009. "First-round valuation of angel-backed companies: the role of investor human capital," Vlerick Leuven Gent Management School Working Paper Series 2009-30, Vlerick Leuven Gent Management School.
  • Handle: RePEc:vlg:vlgwps:2009-30

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    risk capital; business angels; angel investors; human capital; valuation;

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