According to Eric Auchard, a contributor to Reuters‘ website, a newly released academic study has found that “self-financed Angel investors are often found where venture capitalists fear to tread,” and that angel investors also cut the start-ups they invest in better deals, both in early financing rounds and in cases where the company eventually makes its way to an initial public stock offering.
This study, co-authored by William Johnson and Jeffrey Sohl of the University of New Hampshire’s Center for Venture Research, 13.4 per cent of companies that do Initial Public Offerings have only had Angels as investors beforehand.
The researchers also found that Angel investors provide capital to industries that venture capitalists choose not to serve.
