Starting up and Growing New Businesses
Edited by Bart Clarysse, Juan Roure and Tom Schamp
Chapter 5: Business Angels Academies: Unleashing the Potential for Business Angel Investment
5. Business angel academies: unleashing the potential for business angel investment Juan Roure, Rudy Aernoudt and Amparo de San José Riestra 1. INTRODUCTION Business angels have been revealed as important sources of ﬁnance for young and innovative companies. Although their activity remains by large within the private sphere, there are indications that business angels might provide as much as two to ﬁve times the capital that venture capital funds invest in early-stage ventures – in the US, about 36,000 companies receive angel ﬁnance every year. Widely praised as ‘smart’ capital, business angels bring their expertise and experience to complement the entrepreneurial team deﬁciencies. It is generally accepted that the informal venture capital market is largely undeveloped in Europe as compared to the USA. The European Business Angel Network (EBAN) estimates raise the number of individuals who can be considered to be potential angel investors to 850,000 individuals in Europe and 1,750,000 in the USA. This latent mass of individuals, who ﬁt the proﬁle of business angels but have never invested, are often referred to as ‘virgin business angels’. There is evidence that the pool of non-active investors is increasing as compared to investment activity ﬁgures. In the USA, and despite the increase in angel groups’ membership, 41 per cent of angels in those groups were not active, which represents a steady increase over recent years (Sohl and Sommer, 2003). Anecdotal evidence suggests that the same phenomenon is taking place in Europe. As an example, a...