The Consequences of Entrepreneurial Finance: Evidence from Angel Financings

William R. Kerr; Josh Lerner; Antoinette Schoar

doi:10.1093/rfs/hhr098

The Consequences of Entrepreneurial Finance: Evidence from Angel Financings

William R. Kerr^1,2,3; Josh Lerner^1,2,3; Antoinette Schoar⁴

¹ Harvard University · ² Harvard University Press · ³ Dana-Farber/Harvard Cancer Center · ⁴ Massachusetts Institute of Technology

Review of Financial Studies 2014 open access

This article documents the fact that ventures funded by two successful angel groups experience superior outcomes to rejected ventures: They have improved survival, exits, employment, patenting, Web traffic, and financing. We use strong discontinuities in angel- funding behavior over small changes in their collective interest levels to implement a regression discontinuity approach. We confirm the positive effects for venture operations, with qualitative support for a higher likelihood of successful exits. On the other hand, there is no difference in access to additional financing around the discontinuity. This might suggest that financing is not a central input of angel groups.

DOI: 10.1093/rfs/hhr098
Volume: 27 (1)
Pages: 20-55
Language: en
Export: BibTeX
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