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Article
| Review of Financial Studies
| Forthcoming
The Consequences of Entrepreneurial Finance:: Evidence from Angel Financings
by
William R. Kerr, Josh Lerner and Antoinette Schoar
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Abstract
This paper documents that ventures that are 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.
Keywords: Business Ventures;
Financing and Loans;
Interests;
Employment;
Patents;
Web;
Operations;
Entrepreneurship;
Business Exit or Shutdown;