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Tom Lahti and Henrik Keinonen

The chapter focuses on an initiative that has become popular among policy-makers around the world in order to foster business angel activities, namely, business angel networks (BANs). BANs have been established to increase the transparency and improve the efficiency of the business angel market by providing a channel of communication that enables entrepreneurs seeking finance to come into contact with business angels, and at the same time enable business angels to receive information on investment opportunities without the need to compromise their anonymity if so desired. The authors describe the development of BAN activities in different countries and evaluate their benefits and drawbacks. The chapter identifies different kinds of BANs and the different ways that BANs can provide their deal-brokering service and deliver supplementary functions such as training of entrepreneurs and business angels, advisory service, contract templates and the development of good practice. Evaluations of BANs have shown both positive impacts on investment activity as well as negative effects, hence there is no conclusive answer to whether there is a need for public sector interventions to support the establishment and operation of BANs.