Abstract

This study advances knowledge in the field of new venture funding, specifically on angel investing by examining the angel investors who found new banks. Angel investors are an important source of start-up capital; capital provided by angels worldwide is estimated to be many times the amount provided by venture capitalists. As a foundation, the study provides a composite profile of general angel investors drawing upon Benjamin, Freear, Gaston, Margulis, Robinson, Sohl, Van Osnabrugge, and Wetzel. It also draws upon Sullivan & Miller’s work on investment motivations and investor type clusters. In addition to advancing the discipline’s knowledge on angel investors, the study is also relevant to banking industry structure research. While there have been studies of economic factors leading to new bank formation, there has been no study of what motivates the angel investors that fund new banks.

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