This study presents empirical comparisons of fundraising outcomes for entrepreneurial ventures supported by business angels and crowd investors. Utilizing a comprehensive multi-year dataset derived from repeated annual surveys within the business angel (BA) and equity crowdfunding (ECF) markets in Italy, our findings reveal that, despite investing in comparable start-ups, ECF-backed ventures secure lower capital amounts than BA-backed ones. Moreover, ECF-backed start-ups acquire a smaller proportion of capital. These outcomes imply that equity crowdfunding and business angels are not perfect substitutes but rather function as different financial channels for inherently heterogeneous start-ups characterized by distinct funding requirements.
Bonini, S., Capizzi, V., Tenca, F. (2024). Navigating the Start-Up Financing Funding Gap: Comparing Business Angels and Crowdfunding. In Leading and Managing in the Digital Era Shaping the Future of Work and Business Education (pp.77-88). Springer Science and Business Media Deutschland GmbH [10.1007/978-3-031-65782-5_6].
Navigating the Start-Up Financing Funding Gap: Comparing Business Angels and Crowdfunding
Bonini S.;
2024
Abstract
This study presents empirical comparisons of fundraising outcomes for entrepreneurial ventures supported by business angels and crowd investors. Utilizing a comprehensive multi-year dataset derived from repeated annual surveys within the business angel (BA) and equity crowdfunding (ECF) markets in Italy, our findings reveal that, despite investing in comparable start-ups, ECF-backed ventures secure lower capital amounts than BA-backed ones. Moreover, ECF-backed start-ups acquire a smaller proportion of capital. These outcomes imply that equity crowdfunding and business angels are not perfect substitutes but rather function as different financial channels for inherently heterogeneous start-ups characterized by distinct funding requirements.
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