Summary of "The Consequences of Entrepreneurial Finance: A Regression Discontinuity Analysis"
Published: April 15, 2010
Authors: William R. Kerr and Josh Lerner of Harvard Business School and Antoinette Schoar of MIT
This working paper published by Harvard Business School quantifies the positive impact of angel investors on the new ventures they fund. A firm's survival, growth, and access to follow-on capital are considered.
A central question in finance literature is whether or not angels or venture capitalists have a real impact on the companies in which they invest. Anecdotal information about the angel effect on portfolio companies exists, but the impact of angel investors has been far less researched and studied quantitatively than the effect of venture capitalists-even through angel groups are a significant a source of capital for seed, startup, and early stage firms.
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