Handbook of Research on Business Angels
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Handbook of Research on Business Angels

Edited by Hans Landström and Colin Mason

This book synthesizes 30 years of research on business angels by charting the significant role they play in the financing of entrepreneurial businesses in both developed and emerging economies. The expert group of contributors examine business angels themselves, the evolution of the market and the role of public policy in influencing angel investment. Finally, the editors provide an agenda for future research on business angels.
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Chapter 3: The economic significance of business angels: toward comparable indicators

Sofia Avdeitchikova and Hans Landström


In the chapter the authors revisit one of the original topics in business angel research: to measure the scope of the business angel market and evaluate its impact on the economy, especially the financial contributions of business angels at the macro (market) level. This is an issue that has considerable policy relevance. Most policy initiatives to support business angel activities have been introduced without any strong empirical justification nor evidence to inform on the appropriateness of different types of policy measures. In this chapter, the authors summarize our knowledge about the size of the business angel market in different countries. The authors then turn their attention from the size of the market to its ‘significance’; in other words, shifting from a concern with measuring the size of the market to a concern with the relative importance of business angels for funding new and growing ventures in the economy. The authors propose two sets of indicators to evaluate the significance of the business angel market – one that focuses on the supply perspective, that is, the relative importance of business angel finance compared to other sources, and the other that focuses on the demand perspective, that is, the extent to which business angel finance is available in relation to the demand for capital in the small and medium-sized entrepreneur sector.

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