(Im)perfect Substitutes: Business angels and crowd sourced start-up funding

This study provides comparative empirical evidence on the fundraising outcomes and the post-funding performances of ventures supported by either business angels or crowd-investors. Building on a multi-year original dataset combining repeated annual surveys on both angels and equity crowdfunding (ECF) markets, we find that while investing in similar companies, ECF-backed ventures raise less capital than BA-backed ones, acquire a smaller percentage of capital and are less likely to raise follow-on equity financing. These results suggest that ECF and BA are imperfect substitutes that act as screening mechanisms of unobservable heterogenous firms with different risk profiles, growth trajectories and funding needs.

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Publication Details

Journal
International Review of Economics & Finance
Published
2025-08-18
DOI
https://doi.org/10.1016/j.iref.2025.104532
Primary Topic
FinTech, Crowdfunding, Digital Finance
Type
article
Field-Weighted Citation Impact
0.00
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article

(Im)perfect Substitutes: Business angels and crowd sourced start-up funding

Stefano Bonini, Vincenzo Capizzi, Giancarlo Giudici, Francesca Tenca
International Review of Economics & Finance
FinTech, Crowdfunding, Digital Finance
article

(Im)perfect Substitutes: Business angels and crowd sourced start-up funding

Stefano Bonini, Vincenzo Capizzi, Giancarlo Giudici, Francesca Tenca
article en

Abstract

This study provides comparative empirical evidence on the fundraising outcomes and the post-funding performances of ventures supported by either business angels or crowd-investors. Building on a multi-year original dataset combining repeated annual surveys on both angels and equity crowdfunding (ECF) markets, we find that while investing in similar companies, ECF-backed ventures raise less capital than BA-backed ones, acquire a smaller percentage of capital and are less likely to raise follow-on equity financing. These results suggest that ECF and BA are imperfect substitutes that act as screening mechanisms of unobservable heterogenous firms with different risk profiles, growth trajectories and funding needs.

International Review of Economics & FinanceVol. 103
Stevens Institute of Technology (US), Università degli Studi del Piemonte Orientale “Amedeo Avogadro” (IT), Politecnico di Milano (IT)
Openalex Percentile: Top 65%
FinTech, Crowdfunding, Digital Finance
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(Im)perfect Substitutes: Business angels and crowd sourced start-up funding — Stefano Bonini, Vincenzo Capizzi, et al. · International Review of Economics & Finance (2025) | TGRS Research Map | TGRS