Publications
Publications
- 2017
- HBS Working Paper Series
The Right Mix: Angels, Venture Capitalists, and the Assembly of Entrepreneurial Resources
By: Benjamin Hallen and Rory McDonald
Abstract
New ventures rely on external relationships for capital, knowledge, and networks. We examine how ventures assemble these resources—and whether they are all accessible from the same sources—in relationships with two types of investors: venture capital firms and angels. We argue the entrepreneurial investment landscape creates tensions between acquiring capital versus knowledge and networks, and secondarily between knowledge and networks pertinent to early operational execution versus long-term development. Through simultaneous relationships with both types of investors, we suggest, ventures can efficiently assemble both capital (via venture capitalists) and broad networks (via numerous angels). This inference is supported in a sample of 838 digital ventures. Our results address the nature and assembly of entrepreneurial resources, pinpointing the respective contributions of venture capital and angel investors.
Keywords
Citation
Hallen, Benjamin, and Rory McDonald. "The Right Mix: Angels, Venture Capitalists, and the Assembly of Entrepreneurial Resources." Harvard Business School Working Paper, No. 17-082, March 2017.