The chapter reviews the definition of business angels, stressing that love money and angel investing are conceptually different. It emphasises the key features of business angels: they are investing their own money, investing in private unquoted companies, investing directly and are motivated by commercial returns. However, the emergence of managed angel groups has challenged the continued validity of some aspects of this definition. The author then reviews the various ways in which researchers have sought to identify business angels, either for sampling purposes or to estimate the size of the market. Each of the sources reviewed has significant deficiencies. The author is therefore of the same view as Wetzel that the population of business angels ‘is unknown and probably unknowable’. However, he does see the emergence of angel groups as an important development, comprising a significant investment category in their own right and which is visible, in contrast to solo angels who operate informally and so remain largely invisible. He therefore advocates that efforts should be made to collect investment information from such groups on a regular basis.
A Globalizing Industry
Edited by Hans Landström and Colin Mason
This Handbook charts the development of venture capital research in light of the global financial crisis, starting with an analysis of the current venture capital market and the changing nature of the business angel market. Looking at governance structures; the performance of venture capitalists in terms of investments, economic impact and human capital; geographical organization of business angels and venture capital global ‘hotspots’; this book also analyses the current state of venture capital research and offers a roadmap for the future.