- Consulting Editors
- The Capital Flow from Institutional Investors to Entrepreneurs
- Venture Capital and the Financial Crisis: An Empirical Study across Industries and Countries
- Venture Capital Reputation
- Keys to Fundraising Success in Nascent Venture Capital Firms
- Corporate Venture Capital in the Twenty-First Century: an Integral Part of Firms' Innovation Toolkit
- Corporate Venture Capital: From Venturing to Partnering
- Vipe Financing: Venture (Capital) Investments in Public Equity
- Philanthropic Venture Capital From A Global Perspective: Definition and Investment Strategy
- Venture Capital Before The First Dollar: Deal Origination, Screening, and Evaluation
- Capital Structure Determinants In Growth Firms Accessing Venture Funding
- Venture Capital Staging: Domestic Versus Foreign Vc-Led Investments
- Follow-On Financing of Venture Capital–Backed Companies
- Performance Implications of Venture Capital Syndication Networks
- Valuing Common and Preferred Shares in Venture Capital Financing
- Required Rates of Return and Financial Contracting for Entrepreneurial Ventures
- Financial Contracting in U.S. Venture Capital: Overview and Empirical Evidence
- Time-Inconsistent Preferences and Venture Capital Contracting
- Syndication of Vc Investments, Governance, and Contract Design
- Venture Capital in Germany: The Role of Venture Capital Firms' Experience, Ownership Structure, and Agency Problems
- Venture Capital Law Firms: An Analysis of Equity Investments and Networks
- From Ideas to Products: Financing Innovation and Getting Access to Innovation
- The Impact of Venture Capital on Innovation
- What Drives the Top Line?: Determinants of Sales Revenue in Private Venture–Backed Firms
- Value Added by Angel Investors through Postinvestment Involvement: Exploratory Evidence and Ownership Implications
- The Impact of Venture Capital on the Long-Term Performance of IPO Firms: Evidence from Korea
- Regional Impact of Venture Capital
- Spread, Scope, and Scale in Venture Capital Globalization: A Clustered Globalization Model
- The Development of Venture Capital: Macroeconomic, Political, and Legal Determinants
- A Comparative Analysis of Venture Capital Investment In the United States and Europe
- The Role of Geographic Proximity in Venture Capital
- Geography and Venture Capital Investment in the United States, 1995–2009
- The Role of Government, Venture Capital, and Banks in Closing Liquidity Gaps in the SME Sector of an Emerging Market
Abstract and Keywords
This article uses data from The Performance Project: Group Angel Investor, released by the Kauffman Foundation and the Angel Capital Education Foundation in 2007 to investigate the value added by angels through their postinvestment involvement (PII) with ventures. In contrast with findings showing that venture capitalist PII may not significantly affect venture performance, the results show that the PII of angels contributes significantly to value creation. The value added is due to involvement related to mentoring rather than monitoring. This resultant value added has a very important implication for the ownership share that angel investors deserve or, conversely, the share that the entrepreneurship retains. It is an important factor missing in current discussions about the ownership share that entrepreneurs must surrender in exchange for equity capital. The article discusses the implication conceptually and proposes an adjustment to the model proposed in the literature to determine the theoretical ownership share that entrepreneurs deserve to retain.
Jess Chua is professor of finance and holder of the professorship in family business governance at the Haskayne School of Business of the University of Calgary. He has co-authored three books, three monographs, and over 100 papers in academic and professional journals on financial management and family business governance.
Zhenyu Wu is an associate professor and holds the positions of Canada research chair (tier 2) in entrepreneurship and innovation at the University of Manitoba. He graduated from Nankai University with a bachelor degree, and from the University of Calgary with an MA in economics, and an MBA and PhD in finance. He has published in Entrepreneurship Theory and Practice and Journal of Business Venturing, among other journals, and is interested in entrepreneurial finance, entrepreneurship, and corporate governance.
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