There must be an angel? Local financial markets, business angels and the financing of innovative start-ups. Issue 5 (4th May 2019)

• Record Type: Journal Article
• Authors: Grilli, Luca
• Is Part Of: Regional studies. Volume 53:Issue 5(2019)
• Page Start: 620
• Page End: 629
• Publication Date: 2019-05-04
• Subjects: innovative entrepreneurship -- business angels -- local financial markets -- venture capitalists -- banks -- Italy; G20 -- L26 -- M13 -- R11; Regional planning -- Periodicals; Regional planning -- Great Britain -- Periodicals; 307.14
• DOI: 10.1080/00343404.2018.1479524
• Languages: English
• ISSNs: 0034-3404

Abstract

ABSTRACT: This study addresses the question of whether business angels can fill the gap left by venture capitalists and banks in the financing of innovative start-ups in regions where there is a relatively thin financial supply of bank loans and venture capital investments. The empirical analysis, based on approximately 2000 Italian ventures, highlights the fact that innovative start-ups located in weak local financial ecosystems show a relatively low probability of getting business angel financing. In these areas, angel investing is unlikely to represent a viable and effective informal solution to alleviate regional financing gaps towards innovative start-ups left by more institutionalized financial intermediaries.