Investors within a Business Angel (BA) group are embedded in a cohesive network of relationships that arises from past joint investments. In this paper, we have studied how the network position of a BA within this network affects the likelihood that a company will receive investments from the BA group. We have hypothesized a curvilinear, inverse U-shaped relationship between the centrality of the BA and the probability of a company being funded by the BA group. Moreover, we have explored how the experience of a BA and the geographical proximity between the BA and the company influence such a relationship.

This paper investigates VC investment stage drifts as explained by the outcomes of managerial incentive schemes under different financial market conditions and past return performances. We exploit a unique dataset containing data for all of the venture capital funds in Europe that received financial support from the European Investment Fund (EIF) during the years 1998–2007. The dataset includes 149 VC funds that invested in 1925 companies. We find that a higher hurdle rate produces a compensation incentive that discourages VC managers from lowering funds' risk. We also observe that more reputable fund managers are less likely to increase risk by downward stage drifting and more likely to play it safe by following upward stage drifting strategies. Finally, managers of funds with a poor past performance appear to be less keen to perform stage drifts towards less risky stages, relative to well-performing fund managers. The latter evidence is more significant in periods of bull financial markets.