Business angels as facilitators for further finance: an exploratory study

Purpose – The main aim of this article is to widen one's understanding of the value‐added contributions of business angels and, more specifically, their role as facilitators for further finance. Design/methodology/approach – This article is based on in‐depth case studies of five experienced business angels. Data were collected by using a loosely structured interview guide which focused on the investment process. Findings – Business angels add value besides the initial financial capital offered, typically in the form of strategic advice and networking. However, previous research has to a small extent examined the role of business angels as facilitators for further finance. The empirical findings in this study indicate that experienced business angels play a key role in order to facilitate further finance. Furthermore, entrepreneurs should bear in mind that the previous track record of the business angel strongly affects if and how they can facilitate further finance. Thus, active business angels can be viewed as a part of the entrepreneurial team, hence reducing the “liability of newness” for the entrepreneurial firm. Research limitations/implications – Future research should continue to examine business angels by using insight from social capital theory. Moreover, by using larger samples the findings from this exploratory study can be tested, thus getting more reliable results to extend one's knowledge about how business angels act as facilitators for further finance. Originality/value – This study suggests that concepts from social capital theory seem to be viable when examining how business angels work when they are securing further finance for their portfolio firms.