(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.
Authors
- Stefano Bonini (ORCID: https://orcid.org/0000-0003-4247-0476)
- Vincenzo Capizzi (ORCID: https://orcid.org/0000-0003-3761-9942)
- Giancarlo Giudici (ORCID: https://orcid.org/0000-0003-1905-6146)
- Francesca Tenca (ORCID: https://orcid.org/0000-0003-1630-2241)
Institutions
- Stevens Institute of Technology (US)
- Università degli Studi del Piemonte Orientale “Amedeo Avogadro” (IT)
- Politecnico di Milano (IT)
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