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Business Angel Syndication and the Evolution of Risk Capital in a Small Market Economy: Evidence from Scotland
Author(s) -
Gregson Geoff,
Mann Sacha,
Harrison Richard
Publication year - 2013
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.2595
Subject(s) - web syndication , investment (military) , venture capital , equity (law) , business , economics , capital (architecture) , market economy , finance , monetary economics , economy , archaeology , politics , political science , law , history
In this paper, we examine the evolution of risk capital markets in a small market economy, with particular reference to business angel syndication. Scotland provides a valuable case, where the number of business angel syndicates (BAS) has grown from 3 to 18 between 2001 and 2010, the most radical shift in market organisation of any region in Europe. Findings suggest that a narrow range of focused but integrated public policies can be very effective in risk capital ‘capacity building’. Results suggest that syndication generates larger investment deals and more follow‐on investment but results in less new investments, fewer exits and an ‘equity gap’ in the lower end of the market, suggesting the need for ongoing formation of new BAS and greater emphasis on investment exits. Copyright © 2013 John Wiley & Sons, Ltd.