Working Paper: NBER ID: w21808
Authors: Josh Lerner; Antoinette Schoar; Stanislav Sokolinski; Karen Wilson
Abstract: This paper examines investments made by 13 angel groups across 21 countries. We compare applicants just above and below the funding cutoff and find that these angel investors have a positive impact on the growth, performance, and survival of firms as well as their follow-on fundraising. The positive impact of angel financing is independent of the level of venture activity and entrepreneur-friendliness in the country. However, we find that the development stage and maturity of startups that apply for angel funding (and those that are ultimately funded) is inversely correlated with the entrepreneurship-friendliness of the country, which may reflect self-censoring by very early-stage firms that do not expect to receive funding in these environments.
Keywords: angel investments; entrepreneurship; venture capital; startup funding; international comparison
JEL Codes: G24; O31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Angel Investment (G24) | Startup Outcomes (M13) |
| Angel Investment (G24) | Survival Rates (C41) |
| Angel Investment (G24) | Employment Growth (O49) |
| Angel Investment (G24) | Successful Exit (Y60) |
| Angel Investment (G24) | Follow-on Financing (G24) |