Patient capital in entrepreneurial finance: a reassessment of the role of business angel investors

Harrison, R. T., Botelho, T. and Mason, C. M. (2016) Patient capital in entrepreneurial finance: a reassessment of the role of business angel investors. Socio-Economic Review, 14(4), pp. 669-689. (doi: 10.1093/ser/mww024)

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The debate on patient capital, particularly in the varieties of capitalism literature, concentrates on institutions and public markets. In this paper, we take an entrepreneurial finance perspective to examine the investment attitudes and behaviours of business angels. These represent the biggest source of external risk capital for new and young growing companies and therefore play a critical role in entrepreneurial ecosystems. Drawing on both a detailed review of previous research on business angel investment time horizons, investor engagement and exit behaviour and new survey evidence we conclude that only a minority of angels could be defined as being exit-centric investors. It can be concluded that the majority of angels are patient investors in terms of investment intentions, engagement and exit behaviour, largely by default rather than intent. Most do not consider the exit at the investment appraisal stage nor the need for patience.

Item Type:Articles
Additional Information:Special Issue Paper.
Glasgow Author(s) Enlighten ID:Mason, Professor Colin
Authors: Harrison, R. T., Botelho, T., and Mason, C. M.
College/School:College of Social Sciences > Adam Smith Business School > Management
Journal Name:Socio-Economic Review
Publisher:Oxford University Press
ISSN (Online):1475-147X
Copyright Holders:Copyright © 2016 The Authors
First Published:First published in Socio-Economic Review 14(4):669-689
Publisher Policy:Reproduced in accordance with the copyright policy of the publisher

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