Angel investors want to invest their money in companies with a sustainable competitive advantage, run by strong, experienced management teams, and are located in a region with a relevant industrial base and strong universities.
These are among the findings to emerge from a recent study of angel investors—those who invest their personal capital in start-up companies—carried out by Scott Shane, the A. Malachi Mixon III Professor of Entrepreneurial Studies at Case Western Reserve University's Weatherhead School of Management.
Shane, in conjunction with research departments of the Federal Reserve Banks of Atlanta, Cleveland, Denver and Philadelphia, conducted focus groups of angel investors designed to find out more about who they are, what motivates them to invest, what they look for in a potential investment company, and how their investment decisions are affected by policy issues.
Among the significant findings of the study are:
Shane noted that the findings of the study, while useful, are based on a non-representative sample of angel investors and cannot be used to draw definitive conclusions about angel investing in the overall economy. "Our hope is to generate enough interest to obtain funding for a larger-scale, more representative sampling," he said.
Shane has been presenting results of the study in various locations around the country. He will speak in Kansas City on May 30 and Denver on May 31.
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