In Which Ways Can the Channeling between Business Angels and Entrepreneurs Be Improved?

Business Angels are the most important investment source in starting up new enterprises. They invest in small high risk businesses, with the purpose of creating high profits. Unlike institutional venture capital investors, they provide not only the money to start up a new company, but also their time and knowledge gained from previous, usually successful, experiences. Although business angels, in the form that we acknowledge them currently, have existed for many decades, research in this area is limited. The knowledge gained is somewhat insufficient as it is hard to find correct data, because business angels prefer to be anonymous. Thus most research is only about a small part of the informal venture capital investors. This lack of knowledge also contributes to the problem that makes the informal investment market inefficient. The link between these informal investors and the potential new entrepreneurs has been inefficient. Most entrepreneurs do not know where to look for business angels and business angels have trouble finding the right entrepreneur to invest in. Governments have made some policy changes to increase informal venture investment. By creating Business Angel Networks, investors and entrepreneurs can come together and share their ideas. With fiscal incentives, it becomes easier and cheaper for the investors to invest and therefore more accessible.