A comparison of the effect of angels and venture capitalists on innovation and value creation

Journal of Business Venturing

Volumn 31, Issue 1, 2016, Pages 39-54

  Dutta, Supradeep ^a   Folta, Timothy B ^b  

^a UNIVERSITY AT BUFFALO   (United States)

^b UNIVERSITY OF CONNECTICUT   (United States)

Author keywords

Angel investment; Innovation; Patents; Value creation; Venture capital

Indexed keywords

EID: 84947776405     PISSN: 08839026     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.jbusvent.2015.08.003     Document Type: Article

References (56)

1. Aghion P., Tirole J. The management of innovation. Q. J. Econ. 1994, 1185-1209.
2. Baum J.A., Silverman B.S. Picking winners or building them? Alliance, intellectual, and human capital as selection criteria in venture financing and performance of biotechnology startups. J. Bus. Ventur. 2004, 19:411-436.
3. Baum J., Calabrese T., Silverman B.S. Don't go it alone: alliance network composition and startups' performance in Canadian biotechnology. Strateg. Manag. J. 2000, 21:267-294.
4. Berglöf E. A control theory of venture capital finance. J. Law Econ. Org. 1994, 247-267.
5. Bruton G.D., Filatotchev I., Chahine S., Wright M. Governance, ownership structure, and performance of IPO firms: the impact of different types of private equity investors and institutional environments. Strateg. Manag. J. 2010, 31:491-509.
6. Burt R.S. Structural Holes: The Social Structure of Competition 1992, Harvard University Press, Cambridge, MA.
7. Carpentier C., Suret J.M. Angel group members' decision process and rejection criteria: a longitudinal analysis. J. Bus. Ventur. 2015, 2015(30):808-821.
8. Center for Venture Research Report. The Angel Investor Market in 2007: Mixed Signs of Growth http://Weblink:%20https://paulcollege.unh.edu/research/center-venture-research.
9. Center for Venture Research Report. The Angel Investor Market in 2013: A Return to Seed Investing http://Weblink:%20https://paulcollege.unh.edu/research/center-venture-research.
10. Chemmanur T.J., Krishnan K., Nandy D. How does venture capital financing improve efficiency in private firms? A look beneath the surface. Rev. Financ. Stud. 2011, 24:4037-4090.
11. Da Rin M., Hellmann T.F., Puri M. A survey of venture capital research (No. w17523). Natl. Bur. Econ. Res. 2011, (Working Paper 17523). http://www.nber.org/papers/w17523.
12. Ehrlich S.B., De Noble A.F., Moore T., Weaver R.R. After the cash arrives: a comparative study of venture capital and private investor involvement in entrepreneurial firms. J. Bus. Ventur. 1994, 9:67-82.
13. Elitzur R., Gavious A. Contracting, signaling, and moral hazard: a model of entrepreneurs, angels, and venture capitalists. J. Bus. Ventur. 2003, 18:709-725.
14. Engel D., Keilbach M. Firm-level implications of early-stage venture capital investment-an empirical investigation. J. Empir. Finance 2007, 14:150-167.
15. Fiet J.O. Risk avoidance strategies in venture capital markets. J. Manag. Stud. 1995, 32:551-574.
16. Fiet J.O. Reliance upon informants in the venture capital industry. J. Bus. Ventur. 1995, 10:195-223.
17. Freear J., Sohl J.E., Wetzel W.E. Angels and non-angels: are there differences?. J. Bus. Ventur. 1994, 9:109-123.
18. Gans J.S., Hsu D.H., Stern S. When does start-up innovation spur the gale of creative destruction?. RAND J. Econ. 2002, 33:571-586.
19. Goldfarb B., Hoberg G., Kirsch D., Triantis A. Does angel Participation Matter? An Analysis of Early Venture Financing. Unpublished working paper 2009.
20. Griliches Z., Hall B.H., Pakes A. The value of patents as indicators of inventive activity. Economic Policy and Technological Performance 1987, Cambridge University Press, Cambridge. P. Dasgupta, P. Stoneman (Eds.).
21. Hall B.H., Jaffe A., Trajtenberg M. The NBER Patent Citations Data File: Lessons, Insights and Methodological Tools. NBER Working Paper Series 8498 2001.
22. Hall B.H., Jaffe A., Trajtenberg M. Market value and patent citations. RAND J. Econ. 2005, 36:16-38.
23. Hamilton B.H., Nickerson J.A. Correcting for endogeneity in strategic management research. Strateg. Organ. 2003, 1:51-78.
24. Heckman J.J. Sample selection bias as a specification error. Econometrica 1979, 47:153-161.
25. Hellmann T., Puri M. The interaction between product market and financing strategy: the role of venture capital. Rev. Financ. Stud. 2000, 13:959-984.
26. Hellmann T., Puri M. Venture capital and the professionalization of start-up firms: empirical evidence. J. Financ. 2002, 57:169-197.
27. Hochberg Y., Ljungqvist A., Lu Y. Whom you know matters: venture capital networks and investment performance. J. Financ. 2007, 62:251-302.
28. Hsu D.H. Venture capitalists and cooperative start-up commercialization strategy. Manag. Sci. 2006, 52:204-219.
29. Ibrahim D.M. The (not so) puzzling behavior of angel investors. Arizona Legal Studies Discussion Paper 07-16 2008, University of Arizona, James E. Roberts College of Law, AZ.
30. Kerr W., Lerner J., Schoar A. The consequences of entrepreneurial finance: evidence from angel financings. Rev. Financ. Stud. 2014, 27:20-55.
31. Kortum S., Lerner J. Assessing the contribution of venture capital to innovation. RAND J. Econ. 2000, 31:674-692.
32. Lai R., D'Amour A., Yu A., Sun Y., Fleming L. Disambiguation and co-authorship networks of the U.S. patent inventor database (1975-2010). Res. Policy 2014, 43:941-955.
33. Lerner J., Sorensen M., Strömberg P. Private equity and long-run investment: the case of innovation. J. Financ. 2011, 66:445-477.
34. Lindsey L. Blurring firm boundaries: the role of venture capital in strategic alliances. J. Financ. 2008, 63:1137-1168.
35. Maddala G.S. Limited Dependent and Qualitative Variables in Econometrics. Econometric Society Monographs No. 3 1983, Cambridge University Press, Cambridge.
36. Mason C.M., Harrison R.T. Informal venture capital: a study of the investment process, the post-investment experience and investment performance. Entrep. Reg. Dev. 1996, 8:105-126.
37. Mason C.M., Harrison R.T. Is it worth it? The rates of return from informal venture capital investments. J. Bus. Ventur. 2002, 17:211-236.
38. Mollica M., Zingales L. The impact of venture capital on innovation and the creation of new businesses. Unpublished working paper 2007, University of Chicago, IL.
39. Nahata R. Venture capital reputation and investment performance. J. Financ. Econ. 2008, 90:127-151.
40. OECD Financing High-Growth Firms: The Role of Angel Investors 2011, OECD Publishing.
41. PricewaterhouseCoopers MoneyTree Report http://Weblink:%20http://www.pwc.com/en_US.
42. Prowse S. Angel investors and the market for angel investments. J. Bank. Financ. 1998, 22:785-792.
43. Sahlman W.A. The structure and governance of venture-capital organizations. J. Financ. Econ. 1990, 27:473-521.
44. Samila S., Sorenson O. Venture capital as a catalyst to commercialization. Research Policy 2010, 39:1348-1360.
45. Samila S., Sorenson O. Venture capital, entrepreneurship, and economic growth. Rev. Econ. Stat. 2011, 93:338-349.
46. Sapienza H.J. When do venture capitalists add value?. J. Bus. Ventur. 1992, 7:9-27.
47. Shan W., Walker G., Kogut B. Interfirm cooperation and startup innovation in the biotechnology industry. Strateg. Manag. J. 1994, 15:387-394.
48. Shane S. The importance of Angel investing in financing the growth of entrepreneurial ventures. Working Paper 331 2008, Small Business Administration, Office of Advocacy, U.S.
49. Sørensen J.B., Stuart T. Aging, obsolescence, and organizational innovation. Adm. Sci. Q. 2000, 45:81-112.
50. Sorenson O., Stuart T. Syndication networks and the spatial distribution of venture capital investments. Am. J. Sociol. 2001, 106:1546-1588.
51. Stuart T.E., Hoang H., Hybels R. Interorganizational endorsements and the performance of entrepreneurial ventures. Adm. Sci. Q. 1999, 44:315-349.
52. Sudek R., Mitteness C., Baucus M. Betting on the Horse or the Jockey: The Impact of Expertise on Angel Investing. Academy of Management Best Paper Proceedings 2008.
53. Van Osnabrugge M. A comparison of business angel and venture capitalist investment procedures: an agency theory-based analysis. Ventur. Cap. 2000, 2:91-109.
54. Van Osnabrugge M., Robinson R.J. Angel Investing: Matching Startup Funds with Startup Companies-The Guide for Entrepreneurs and Individual Investors 2000, John Wiley.
55. Vanacker T., Collewaert V., Paeleman I. The relationship between slack resources and the performance of entrepreneurial firms: the role of venture capital and angel investors. J. Manag. Stud. 2013, 50:1070-1096.
56. Wiltbank R., Boeker W. Angel investor performance project: data overview. Soc. Sci. Res. Net. (SSRN) 2007, 1024714.