Business angel investing during the covid-19 economic crisis: Evidence from Scotland

Mason, Colin and Botelho, Tiago (2021) Business angel investing during the covid-19 economic crisis: Evidence from Scotland. Venture Capital, 23 (4). pp. 321-343. ISSN 1369-1066

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The onset of the coronavirus pandemic in early 2020 quickly gave rise to a concern that the resulting economic uncertainty would produce a collapse in angel investing. In view of the critical role that business angels play in financing the start of the entrepreneurial pipeline, a decline in their investment activity would have a negative effect on the ability of entrepreneurs to start and commence the scaling process which, in turn, would compromise an entrepreneur-led economic recovery from the coronavirus pandemic. This paper draws on two unique data sources on investments made by business angels in Scotland before and since the onset of the pandemic. It shows that business angels continued to invest since the onset of the crisis although their investment activity declined sharply between Q2 and Q3 2020. Investment activity stabilising in Q4 and has significantly increased during 2021 and is now above pre-Covid levels. Angels have increased their emphasis on follow-on investments and in businesses that have raised one or more previous rounds of funding. This highlights a potential problem for entrepreneurs seeking to raise their first round of angel funding that policy-makers need to address.

Item Type: Article
Additional Information: The authors are most grateful to David Grahame, OBE, Chief Executive of LINC Scotland and Jonathan Harris, publisher of Young Company Finance for making their data available.
Uncontrolled Keywords: covid-19 pandemic,business angels,economic crisis,entrepreneurs,start-ups,scaleups,finance ,/dk/atira/pure/subjectarea/asjc/2000/2003
Faculty \ School: Faculty of Social Sciences > Norwich Business School
UEA Research Groups: Faculty of Social Sciences > Research Groups > Strategy and Entrepreneurship
Related URLs:
Depositing User: LivePure Connector
Date Deposited: 04 Jan 2022 12:30
Last Modified: 23 Oct 2022 03:27
DOI: 10.1080/13691066.2021.2019564


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