Angel network: Difference between revisions
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'''Angel network''' is a network of business angels - high-[[risk]], informal investors, who seek the opportunities for investing their [[money]] into promising businesses. Creating angel network is a beginning that is necessary for building angel [[investment]] markets, which are thought to be the future of business investment<ref>Tooth J. (2015) ''[http://www.business-angels.de/wp-content/uploads/2015/12/BAE-Book-final.pdf The European Business Angels Market. An Approximation.]'' </ref>. Business angeels for networks to have more impact on foreign funding and finances in general. | |||
==Impact of angel network investing== | |||
== Impact of angel network investing == | |||
Whereas there are numerous types of foreign investment, formal or informal, it is actually angel investment that takes up majority of foreign investment in all of Europe. Sadly, there are no statistics or numbers to refer to, as may of the business transactions that include angel networks are completed in "invisible markets", outside other networks, clubs or matching platforms. Moreover, the size of the [[market]], taking only '''Europe''' in consideration, on which they [[work]] is unmeasurable. | Whereas there are numerous types of foreign investment, formal or informal, it is actually angel investment that takes up majority of foreign investment in all of Europe. Sadly, there are no statistics or numbers to refer to, as may of the business transactions that include angel networks are completed in "invisible markets", outside other networks, clubs or matching platforms. Moreover, the size of the [[market]], taking only '''Europe''' in consideration, on which they [[work]] is unmeasurable. | ||
Other data shows that it is angel networking that has helped numerous European start-ups, business incubators, etc. with [[financing]] and also with mentoring. From economic point of view, angel networks, using their private capital, [[knowledge]] and askills to support small businesses<ref>Tooth J. (2015) ''[http://www.business-angels.de/wp-content/uploads/2015/12/BAE-Book-final.pdf The European Business Angels Market. An Approximation.]'' </ref>. | Other data shows that it is angel networking that has helped numerous European start-ups, business incubators, etc. with [[financing]] and also with mentoring. From economic point of view, angel networks, using their private capital, [[knowledge]] and askills to support small businesses<ref>Tooth J. (2015) ''[http://www.business-angels.de/wp-content/uploads/2015/12/BAE-Book-final.pdf The European Business Angels Market. An Approximation.]'' </ref>. | ||
== Profile of angel investors == | ==Profile of angel investors== | ||
While talking about angel investors, both working independently and the ones creating nationally recognizable networks, the most popular picture that comes to mind are '''ex-managers and entrepreneurs'''. However, nowadays the age | While talking about angel investors, both working independently and the ones creating nationally recognizable networks, the most popular picture that comes to mind are '''ex-managers and entrepreneurs'''. However, nowadays the age of business angels is significantly lower. They are mostly successful entrepreneurs that sold their [[start-up]] and are now looking for new business opportunity. Also, the important aspect that has an impact on this change is the fact that today the entrepreneurs are looking for investment opportunities outsiide their home region<ref>Tooth J. (2015) ''[http://www.business-angels.de/wp-content/uploads/2015/12/BAE-Book-final.pdf The European Business Angels Market. An Approximation.]'' </ref>. However, in the late 1990s the average age of a European [[business angel]] was somewhere between 40 and 60. | ||
While looking at overviews from the 1996 and from 2015,it shows that there are some things that haven't changed with time - an average business angel appreciates being anonymous or at least not be a face of the [[company]] he starts to support and mentor<ref> Lumme A., Mason C., Suomi M. (1996) ''[https://www.econstor.eu/bitstream/10419/114700/1/jef-1996-05-2-d-lumme.pdf The Returns From Informal Venture Capital Investments: An Exploratory Study]'' "Journal of Entrepreneurial and Small Business Finance"</ref>. Creating angel networks changed that preferences a bit, because European networks are, depending on the region of course, mostly known in the whole country. It is preferable to create one or two big angel networks that cover the small businesses and start-ups all across the nation than watch many smaller angel networks fight for their opportunities. | While looking at overviews from the 1996 and from 2015,it shows that there are some things that haven't changed with time - an average business angel appreciates being anonymous or at least not be a face of the [[company]] he starts to support and mentor<ref> Lumme A., Mason C., Suomi M. (1996) ''[https://www.econstor.eu/bitstream/10419/114700/1/jef-1996-05-2-d-lumme.pdf The Returns From Informal Venture Capital Investments: An Exploratory Study]'' "Journal of Entrepreneurial and Small Business Finance"</ref>. Creating angel networks changed that preferences a bit, because European networks are, depending on the region of course, mostly known in the whole country. It is preferable to create one or two big angel networks that cover the small businesses and start-ups all across the nation than watch many smaller angel networks fight for their opportunities. | ||
In the '''United States''' the case looks different - business angels are mostly focusing on high growth companies so that they can be more sure of | In the '''United States''' the case looks different - business angels are mostly focusing on high growth companies so that they can be more sure of their potential income. Also, from geographic point of view, the angel networks in USA focus more on a limited number of areas that are mostly connected with business opportunnities and development. These areas include<ref> Carlson C, Chakrabarti P. (2007) ''[https://core.ac.uk/download/pdf/6761915.pdf Venture Capital Investment in Secondary CitiesIssues and Opportunities for Impact]'' "Community Affairs", vol.7</ref>: | ||
* Boston | * Boston | ||
* San Francisco | * San Francisco | ||
| Line 33: | Line 16: | ||
All of them combined take up to 50% of foreign investment in the whole country. | All of them combined take up to 50% of foreign investment in the whole country. | ||
== Footnotes == | ==Footnotes== | ||
<references/> | <references/> | ||
== References == | {{infobox5|list1={{i5link|a=[[Financial center]]}} — {{i5link|a=[[World insurance]]}} — {{i5link|a=[[Business failure]]}} — {{i5link|a=[[Big four]]}} — {{i5link|a=[[Microfinance institution]]}} — {{i5link|a=[[Country basket]]}} — {{i5link|a=[[Frontier market]]}} — {{i5link|a=[[Chartered wealth manager]]}} — {{i5link|a=[[Innovation and entrepreneurship]]}} }} | ||
==References== | |||
* Carlson C, Chakrabarti P. (2007), ''[https://core.ac.uk/download/pdf/6761915.pdf Venture Capital Investment in Secondary CitiesIssues and Opportunities for Impact]'', "Community Affairs", vol.7; | * Carlson C, Chakrabarti P. (2007), ''[https://core.ac.uk/download/pdf/6761915.pdf Venture Capital Investment in Secondary CitiesIssues and Opportunities for Impact]'', "Community Affairs", vol.7; | ||
* Lumme A., Mason C., Suomi M. (1996), ''[https://www.econstor.eu/bitstream/10419/114700/1/jef-1996-05-2-d-lumme.pdf The Returns From Informal Venture Capital Investments: An Exploratory Study]'', "Journal of Entrepreneurial and Small Business Finance"; | * Lumme A., Mason C., Suomi M. (1996), ''[https://www.econstor.eu/bitstream/10419/114700/1/jef-1996-05-2-d-lumme.pdf The Returns From Informal Venture Capital Investments: An Exploratory Study]'', "Journal of Entrepreneurial and Small Business Finance"; | ||
* Tooth J. (2015), ''[http://www.business-angels.de/wp-content/uploads/2015/12/BAE-Book-final.pdf The European Business Angels Market. An Approximation.]'' | * Tooth J. (2015), ''[http://www.business-angels.de/wp-content/uploads/2015/12/BAE-Book-final.pdf The European Business Angels Market. An Approximation.]'' | ||
[[Category: Economics]] | [[Category: Economics]] | ||
{{a|Olga Muryn}} | {{a|Olga Muryn}} | ||
Latest revision as of 16:42, 17 November 2023
Angel network is a network of business angels - high-risk, informal investors, who seek the opportunities for investing their money into promising businesses. Creating angel network is a beginning that is necessary for building angel investment markets, which are thought to be the future of business investment[1]. Business angeels for networks to have more impact on foreign funding and finances in general.
Impact of angel network investing
Whereas there are numerous types of foreign investment, formal or informal, it is actually angel investment that takes up majority of foreign investment in all of Europe. Sadly, there are no statistics or numbers to refer to, as may of the business transactions that include angel networks are completed in "invisible markets", outside other networks, clubs or matching platforms. Moreover, the size of the market, taking only Europe in consideration, on which they work is unmeasurable. Other data shows that it is angel networking that has helped numerous European start-ups, business incubators, etc. with financing and also with mentoring. From economic point of view, angel networks, using their private capital, knowledge and askills to support small businesses[2].
Profile of angel investors
While talking about angel investors, both working independently and the ones creating nationally recognizable networks, the most popular picture that comes to mind are ex-managers and entrepreneurs. However, nowadays the age of business angels is significantly lower. They are mostly successful entrepreneurs that sold their start-up and are now looking for new business opportunity. Also, the important aspect that has an impact on this change is the fact that today the entrepreneurs are looking for investment opportunities outsiide their home region[3]. However, in the late 1990s the average age of a European business angel was somewhere between 40 and 60. While looking at overviews from the 1996 and from 2015,it shows that there are some things that haven't changed with time - an average business angel appreciates being anonymous or at least not be a face of the company he starts to support and mentor[4]. Creating angel networks changed that preferences a bit, because European networks are, depending on the region of course, mostly known in the whole country. It is preferable to create one or two big angel networks that cover the small businesses and start-ups all across the nation than watch many smaller angel networks fight for their opportunities. In the United States the case looks different - business angels are mostly focusing on high growth companies so that they can be more sure of their potential income. Also, from geographic point of view, the angel networks in USA focus more on a limited number of areas that are mostly connected with business opportunnities and development. These areas include[5]:
- Boston
- San Francisco
- Los Angeles
- New York
- Houston
All of them combined take up to 50% of foreign investment in the whole country.
Footnotes
- ↑ Tooth J. (2015) The European Business Angels Market. An Approximation.
- ↑ Tooth J. (2015) The European Business Angels Market. An Approximation.
- ↑ Tooth J. (2015) The European Business Angels Market. An Approximation.
- ↑ Lumme A., Mason C., Suomi M. (1996) The Returns From Informal Venture Capital Investments: An Exploratory Study "Journal of Entrepreneurial and Small Business Finance"
- ↑ Carlson C, Chakrabarti P. (2007) Venture Capital Investment in Secondary CitiesIssues and Opportunities for Impact "Community Affairs", vol.7
| Angel network — recommended articles |
| Financial center — World insurance — Business failure — Big four — Microfinance institution — Country basket — Frontier market — Chartered wealth manager — Innovation and entrepreneurship |
References
- Carlson C, Chakrabarti P. (2007), Venture Capital Investment in Secondary CitiesIssues and Opportunities for Impact, "Community Affairs", vol.7;
- Lumme A., Mason C., Suomi M. (1996), The Returns From Informal Venture Capital Investments: An Exploratory Study, "Journal of Entrepreneurial and Small Business Finance";
- Tooth J. (2015), The European Business Angels Market. An Approximation.
Author: Olga Muryn
