| Abstract |
As from last years of practice we could see that Business Angels play an important role in the economy, and in many countries constitute the largest source of external funding, after family and friends, in newly established ventures. Business Angels provide both financing and managerial experience, which increase the likelihood of the survival of start-up enterprises. But the fundamental nature of the Business Angel market is informal. Most Angels have a desire for anonymity, and are unwilling to reveal information about their investment activities. Why? Because, as every private person each Business Angel has his or her own rights and responsibilities. At this time we should mention scientist’s point of answer to the question what is a Business Angel. Business Angel is - “A knowledgeable private individual, usually with business experience, who directly invests part of his or her personal assets in new and growing unquoted businesses. Besides capital, Business Angels provide business management experience for the entrepreneur.” So, here we could understand that BA is almost different then SMEs and it will not be easy to do Research on Business Angels investing or Crowdfunding which is going to be very developed and popularized near future in US and European market. The resulting absence of reliable statistical data makes evidence-based policy making in this area difficult. Given the importance of informal investors for the creation and maintenance of an entrepreneurial economy, more data is needed from the angel investment market in order to make rational and well-grounded policy decisions.
The objective of this evaluation is to improve policy-making regarding SMEs’ access to seed and early stage capital by increasing the knowledge of the characteristics of the Business Angels market and sharing EU Member States’ best practices of policies and programs supporting Business Angel financing.
According to available data, the Business Angels in German market is comprised of around 5,000-10,000 individual informal investors with a total size of €200-€300 million per annum. 10-20% of the Business Angel (1000-1400) and 25-50% of the investments are made from Business Angels that are organized in BANs. There are around 40 BANs operating in Germany, most of them also being members of the national BAN association, BAND. According to the national association (BAND), the Business Angels market in Germany has the potential to reach a total value of €5 billion.
Business Angels also provided support for the expansion of existing firms, in the form of second-round follow-up investments. On average German Business Angels hold 5 to 7 participations and the average holding period is around 4 to 7 years (Fryges et al, 2007). Wallisch (2009)90 suggests a wider range of 3 to 10 years with an average of below 5 years). |
