From the knowledge perspective a firm can be understood as a social community specializing in the speed and efficiency in the creation and transfer of knowledge (Kogut and Zander 1995). One way to expand the knowledge base of a firm is to attract it from external sources such as venture capital investors (Bygrave and Timmons 1992, Hellmann and Puri 2000, Lerner 1994 and Gompers 1995, Baker and Gompers, 2001). Business angels are considered an alternative/complementary source of venture capital, and are also tagged as “smart capital” and because their, often, direct and intense involvement in the venture they are a non-negligible source of “acquired” knowledge. Nevertheless, the fact that business angels are a source of knowledge does not mean that it is transferred to the end-user: the entrepreneur/s or manager/s. For this, an effective knowledge transfer has to take place. We pose the following questions: 1) What type of knowledge is transferred from the angel to the entrepreneur? 2) Is the transfer of knowledge between the angel and the entrepreneur easier when they have common knowledge basis? 3) Does an informal relationship between the entrepreneur and the angel facilitate the transfer of knowledge?