The role of government co-investment funds in the supply of entrepreneurial finance: An assessment of the early operation of the UK Angel Co-investment Fund

Owen (Baldock), Robyn and Mason, Colin (2017) The role of government co-investment funds in the supply of entrepreneurial finance: An assessment of the early operation of the UK Angel Co-investment Fund. Environment and Planning C: Politics and Space, 35 (3). pp. 434-456. ISSN 2399-6552

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Abstract

Co-investment funds – which invest alongside private investors, especially business angels – thereby leveraging their networks and experience and minimizing public sector transaction costs – are a recent approach by governments in various countries to address the early stage entrepreneurial funding gap which is perceived as a barrier to the ability of firms to scale-up. However, little literature exists on their operation, impact and effectiveness. This paper assesses the early operation of the UK’s Angel Co-investment Fund, established in 2011. Interview evidence from angels and business managers suggests that the Angel Co-investment Fund is improving the availability of finance by enabling firms to raise funding rounds of between £500,000 and £2 m, hence addressing some aspects of the broken finance escalator model. However, our evidence suggests that it is not yet impacting the supply side, either in terms of stimulating the formation of new angel groups or enhancing learning amongst less experienced angels. Some aspects of the operation of the investment process have attracted criticism from angels and entrepreneurs which need to be addressed. Nevertheless, there is sufficient evidence for positive impact to justify the scheme’s expansion.

Item Type: Article
Additional Information: ** From Crossref via Jisc Publications Router.
Research Areas: A. > Business School
Item ID: 23209
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SWORD Depositor: Jisc Publications Router
Depositing User: Jisc Publications Router
Date Deposited: 18 Dec 2017 10:33
Last Modified: 07 Sep 2018 22:22
URI: http://eprints.mdx.ac.uk/id/eprint/23209

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