Financing innovative start-ups in Portuguese context: what is the role of business angels networks?

Business angels provide both financing and managerial experience, which increase the likelihood of the survival of innovative start-ups. Over the last years, European countries with developing informal venture capital markets have seen governments support the creation of business angels networks (BANs) to increase and consolidate these markets. Using the Portuguese context to carry out the empirical work, this paper provides an assessment of value added provided by angels’ networks. A total of 88 useable responses were received and analysed using non-parametric statistical techniques. This paper demonstrates that is evidence of positive contribution of BANs in terms of bringing together investors and linking them with entrepreneur’s seeking finance. BANs played an important role in financing innovative start-ups also in peripheral regions. Results lead us to conclude that government support BANs would appear to be an effective mechanism to stimulate the angel market in developing informal venture capital markets. The conclusions of this paper are likely to have relevance for countries where there is growing interest in the potential of business angels as a means of financing innovative start-ups.

Formalization of the informal venture capital market - Business angel networks and syndicates

Business angels are natural persons who provide equity financing for young enterprises and gain ownership in them. They are usually anonym investors and they operate in the background of the companies. Their important feature is that over the funding of the enterprises based on their business experiences they can contribute to the success of the companies with their special expertise and with strategic support. As a result of the asymmetric information between the angels and the companies their matching is difficult (Becsky-Nagy – Fazekas 2015), and the fact, that angel investors prefer anonymity makes it harder for entrepreneurs to obtain informal venture capital. The primary aim of the different type of business angel organizations and networks is to alleviate this matching process with intermediation between the two parties. The role of these organizations is increasing in the informal venture capital market compared to the individually operating angels. The recognition of their economic importance led many governments to support them. There were also public initiations that aimed the establishment of these intermediary organizations that led to the institutionalization of business angels. This study via the characterization of business angels focuses on the progress of these informational intermediaries and their ways of development with regards to the international trends and the current situation of Hungarian business angels and angel networks.

Aproximació a la figura dels Business Angels

Els business angels són persones físiques que inverteixen una part dels seus diners en empreses joves, tot just acabades de crear, en alguns casos fins i tot ajuden a crear-les. El nom d’àngels té el seu origen en els rics filantrops de Nova York que finançaven les obres que s’estrenaven a Broadway. Aquests filantrops invertien els seus diners en una obra de teatre, pel plaer de contribuir a la cultura, molt sovint no arribaven a recuperar mai aquests diners. Els business angels, no són filantrops, inverteixen esperant guanyar diners, però al igual que els àngels de Broadway, els mou alguna cosa més que els diners, ja que està àmpliament documentat que darrera d’aquestes inversions hi ha també raons no financeres, com ara fomentar l’esperit emprenedor o fins i tot la cerca de diversió. Podríem dir que el terme “business angel” es va encunyar a principis dels 80 als EUA, per tant aviat farà 30 anys, no obstant, encara avui, la majoria de catalans no coneixen el significat d’aquest terme. A Catalunya i Espanya anem terriblement retardats en l’estudi i la promoció d’aquesta figura en relació a països com els EUA i el Regne Unit, però també massa enrera en relació a països com Finlàndia, Suècia, Noruega i Alemanya. L’objectiu d’aquest treball és doncs oferir una complerta aproximació a aquesta figura del business angel, una figura que entenem clau en el desenvolupament empresarial i per tant una figura que cal potenciar a tots els nivells. Per tal de contextualitzar aquesta important figura, el treball parteix de l’anàlisi de la relació existent entre emprenedoria i creixement econòmic, s’endinsa després en el capital risc, per presentar finalment qui és i que fa el business angel. El treball intenta també mostrar l’abús d’usos i la inconsistència de les definicions que es donen del terme “business angel” i per tant la gran confusió que tot això genera.

Business support networks for social businesses: a study of the Brazilian ecosystem

Negócios sociais, empresas autossuficientes com objetivos principalmente sociais estão a surgir e a mudar o cenário económico mundial. No Brasil, o campo de Empreendedorismo Social promete ajudar a resolver os vários problemas sociais do país, mas tal promessa depende do desenvolvimento de um ecossistema de suporte. No entanto, a pesquisa desenvolvida no tópico ainda é limitada, especialmente quando considerando pesquisa em contextos macro como estruturas de suporte ao negócio. O presente estudo explora o ecossistema de suporte aos negócios sociais no Brasil, oferecendo uma análise qualitativa preliminar da eficácia da rede de suporte existente para os negócios sociais, de acordo com as perceções de empreendedores sociais e prestadores de suporte. O estudo é desenvolvido baseando-se no modelo conceptual de Turrini et al. (2010) sobre os determinantes de eficácia de redes a fim de facilitar a captura de padrões. Desta forma, cada variável de eficácia de redes é desenvolvida no contexto da presente investigação e as principais conclusões relativas ao ecossistema de suporte para negócios sociais no Brasil são destacadas. Os resultados sugerem um rápido crescimento da disponibilidade de suporte para negócios sociais, mas indicam que estes serviços ainda são em número limitado e concentrados no Sudeste do país. Adicionalmente, os serviços de suporte são percecionados pelos empreendedores sociais como serviços de alta qualidade e embora se observe um sentimento generalizado de que a colaboração entre organizações de suporte tem sido importante para a construção do campo, os resultados indicam que um maior nível de interação e formalização entre prestadores de suporte levaria a maiores níveis de criação de sinergias e potenciaria a construção do ecossistema. Por último, é observado um sentimento generalizado de que o crescente nível de recursos financeiros, consciência pública e apoio do governo ao campo impactarão positivamente o desenvolvimento do ecossistema.

Business angels: a forma como o empresário, o investidor e a empresa influenciam o montante investido

Este estudo pretende determinar a influência das características do empresário, das características do investidor e das características da empresa sobre o montante inicialmente investido pelos BA. Para esse efeito, recorreu-se a uma amostra extraída da base de dados da Kauffman Foundation, cujos dados dizem respeito a BA dos E.U.A.. Analisaram-se as estatísticas descritivas e as hipóteses foram testadas através de seis modelos de regressão linear múltipla. Os resultados obtidos mostram que seis dos nove fatores identificados dizem respeito ao empresário e à equipa de gestão; ABSTRACT: This study aims to determine the influence of entrepreneur characteristics, investor characteristics and the characteristics of the company on the amount initially invested by BA. For this purpose, we used a sample extracted from Kauffman Foundation database, whose data refer to BA from the United States of America. We performed descriptive statistics and hypotheses were tested through six models of multiple linear regression. The results show that six of the nine factors identified are related to the entrepreneur and management team.

El efecto producido por la presencia de "business angels" en la empresa

El creciente interés por fuentes de financiación alternativas, como son los business angels (BA) y el capital riesgo, ha producido la necesidad de estudiar los efectos que la presencia de este tipo de inversores produce en las empresas. Son muchas las investigaciones realizadas sobre el impacto generado por el capital riesgo en sus empresas participadas. Sin embargo, las características de los BA, entre las que destacan el anonimato y preferencia por la privacidad, dificultan considerablemente la elaboración de estudios e investigaciones sobre los efectos producidos por su actividad. Es por ello que el objetivo de este trabajo no es otro que analizar el efecto que la presencia de los BA produce en las empresas participadas. Para la consecución del objetivo establecido, la investigación se centra en analizar el efecto que la participación de los BA produce en la supervivencia de los proyectos empresariales. Además, se toman como referencia las ventas y el número de empleados para estudiar el impacto que la implicación de este tipo de inversores produce en el crecimiento de las mismas. En concreto, a través de la metodología aplicada se han obtenido resultados que muestran que la presencia de BA en empresas de reciente creación genera un impacto positivo en las dos variables propuestas: ventas y número de empleados. Además de lo anterior, se aprecia que las empresas en las que este tipo de inversores se encuentran implicados presentan tasas de supervivencia superiores respecto a las que no disponen de su respaldo. Por lo tanto, las conclusiones obtenidas a través de este trabajo sirven de base para dar comienzo a un estudio más profundo, que verifique que al igual que el capital riesgo, los BA también impactan positivamente en la evolución de las empresas participadas.

Motives, Challenges and Success Factors in the Business Partner Network

Tässä työssä käsitellään niitä motiiveja, haasteita ja menestystekijöitä, jotka vaikuttavat lisäarvoatuottavassa liiketoimintaverkostossa. Työssä on selvitetty sitä, miten partneriverkostot syntyvät sekä mitkä seikat vaikuttavat siihen jatkuuko yhteistyö vai ei. Motiiveja partneruuteen on tutkittu kirjallisuudesta sekä analysoimalla työssä esitettyä tapausta. Tässä työssä käydään keskustelua myös partneruuden elinkaaresta, jota ei ole käsitellyssä kirjallisuudessa tuotu esille. Työssä esitettyä tapausta arvioitiin lähettämällä siihen liittyneille henkilöille kysely. Kyselyiden lähettämisen jälkeen järjestettiin haastattelu kyselyyn vastanneiden kanssa. Lopputulokset perustuvat pitkälti haastateltujen henkilöiden kanssa käytyihin keskusteluihin. Kävi ilmi, että arvoa tuottavan partneriverkoston yksi tärkeimpiä tavoitteita on saavuttaa jatkuvuutta liiketoiminnallaan. Ainoastaan pitkäaikaisella partneruudella voidaan saavuttaa merkittäviä etuja markkinoilla. Siksi on tärkeätä, jo partnerin valinnassa, kiinnittää huomiota partneruuden jatkuvuuteen pitkällä tähtäimellä. Liiketoimintaverkostossa partneruudesta syntyvät tuotot ja niiden jakaminen on tärkein yksittäinen osaalue. Oleellista partneruuden jatkuvuudelle pitkällä tähtäimellä on jo partneria valittaessa se, että kyetään arvioimaan miten partneruudesta syntyvät tuotot jaetaan tasapuolisesti ja onko partneruudesta syntyvälle liiketoiminnalle jatkuvuutta. Jotta partneriverkostolle asetetut tavoitteet voitaisiin saavuttaa, on tärkeää suunnitella partneriverkoston hallintaa myös operatiivisella tasolla. Lisäksi tärkeää on jakaa verkostolle asetetut yhteiset tavoitteet organisaatioiden sisällä. Jos ylemmänja operatiivisen tason johdon yhteistyö on riittämätöntä, se vaikeuttaa oleellisesti asetettujen tavoitteiden saavuttamista. Tiedon jakaminen aikaisessa vaiheessa sitouttaa eri sidosryhmät paremmin yhteisiin tavoitteisiin.

From network pictures to network insight in solution business – the role of internal communication

Operating in business-to-business markets requires an in-depth understanding on business networks. Actions and reactions made to compete in markets are fundamentally based on managers‘ subjective perceptions of the network. However, an amalgamation of these individual perceptions, termed a network picture, to a common company level shared understanding on that network, known as network insight, is found to be a substantial challenge for companies. A company‘s capability to enhance common network insight is even argued to lead competitive advantage. Especially companies with value creating logics that require wide comprehension of and collaborating in networks, such as solution business, are necessitated to develop advanced network insight. According to the extant literature, dispersed pieces of atomized network pictures can be unified to a common network insight through a process of amalgamation that comprises barriers/drivers of multilateral exchange, manifold rationality, and recursive time. However, the extant body of literature appears to lack an understanding on the role of internal communication in the development of network insight. Nonetheless, the extant understanding on the amalgamation process indicates that internal communication plays a substantial role in the development of company level network insight. The purpose of the present thesis is to enhance understanding on internal communication in the amalgamation of network pictures to develop network insight in the solution business setting, which was chosen to represent business-to-business value creating logic that emphasizes the capability to understand and utilize networks. Thus, in solution business the role of succeeding in the amalgamation process is expected to emphasize. The study combines qualitative and quantitative research by means of various analytical methods including multiple case analysis, simulation, and social network analysis. Approaching the nascent research topic with differing perspectives and means provides a broader insight on the phenomenon. The study provides empirical evidence from Finnish business-to-business companies which operate globally. The empirical data comprise interviews (n=28) with managers of three case companies. In addition the data includes a questionnaire (n=23) collected mainly for the purpose of social network analysis. In addition, the thesis includes a simulation study more specifically achieved by means of agent based modeling. The findings of the thesis shed light on the role of internal communication in the amalgamation process, contributing to the emergent discussion of network insights and thus to the industrial marketing research. In addition, the thesis increases understanding on internal communication in the change process to solution business, a supplier‘s internal communication in its matrix organization structure during a project sales process, key barriers and drivers that influence internal communication in project sales networks, perceived power within industrial project sales, and the revisioning of network pictures. According to the findings, internal communication is found to play a substantial role in the amalgamation process. First, it is suggested that internal communication is a base of multilateral exchange. Second, it is suggested that internal communication intensifies and maintains manifold rationality. Third, internal communication is needed to explicate the usually differing time perspectives of others and thus it is suggested that internal communication has role as the explicator of recursive time. Furthermore, the role of an efficient amalgamation process is found to be emphasized in solutions business as it requires a more advanced network insight for cross-functional collaboration. Finally, the thesis offers several managerial implications for industrial suppliers to enhance the amalgamation process when operating in solution business.

Da ideia inovadora ao projecto de negócio: metodologia para concepção de negócios que pretendam angariar capital de risco baseada na teoria axiomática do projecto

Dissertação para obtenção do grau de Mestre em Engenharia Mecânica

Return on entrepreneurial passion: A study of funding success and timely delivery in crowdfunding

A Work Project, presented as part of the requirements for the Award of a Masters Degree in Management from the NOVA – School of Business and Economics

Expertise and finance: Mergers motivated by technological change

This paper argues that a large technological innovation may lead to a merger wave by inducing entrepreneurs to seek funds from technologically knowledgeable firms -experts. When a large technological innovation occurs, the ability of non-experts (banks) to discriminate between good and bad quality projects is reduced. Experts can continue to charge a low rate of interest for financing because their expertise enables them to identify good quality projects and to avoid unprofitable investments. On the other hand, non-experts now charge a higher rate of interest in order to screen bad projects. More entrepreneurs, therefore, disclose their projects to experts to raise funds from them. Such experts are, however, able to copy the projects and disclosure to them invites the possibility of competition. Thus the entrepreneur and the expert may merge so as to achieve product market collusion. As well as rationalizing mergers, the model can also explain various forms of venture financing by experts such as corporate investors and business angels.

Kansainvälistymisen verkostomalli

This paper is a Bachelor's degree thesis considering the network model of internationalization. The paper is presented in the program of Industrial Management and International Marketing at Lappeenranta University of Technology. Globalization has increased the importance of internationalization process in which firms create business in networks. The internationalization of firms and establishment of business networks are known to be interconnected. For example, networks may help a firm to penetrate into new markets. The objective in this thesis is to make a literature study to clarify what is meant by the network model of internationalization in academic discussion. How business networks are related to firm's internationalization, what are the reasons why the model was born and how the network theory differs from the earlier theory? Furthermore, we would like to know what are the possible advantages and disadvantages of internationalizing via networks for small and medium-sized enterprises.

Järjestelmätoimittajan suorituskyvyn mittaaminen johtamisen välineenä

Tutkimuksen tavoitteena on analysoida kokonaisratkaisuja tarjoavan järjestelmätoimittajan suorituskyvyn mittaamisen suunnittelua johdon päätöksenteon tukivälineeksi. Alitavoitteena oli suunnitella mittaristo case-yrityksen valitulle yksikölle sekä konsernitasolle. Tutkimuksen myötä havaittiin tarpeelliseksi tunnistaa järjestelmätoimittajan toimialatason vahvimmat ydinkyvykkyydet ja esittää ratkaisuja niiden mittaamiselle. Tutkimuksesta rajattiin mittariston hyödyntäminen yksilötason ohjauksessa. Tutkimusta lähestyttiin toiminta-analyyttisenä tapaustutkimuksena. Tutkimuksen yhteydessä määriteltiin järjestelmätoimittaja teollisen palveluliiketoiminnan toimijaksi, jonka mittaus painottuu asiakaslähtöisen toiminnan edistämiseen. Suurimmat haasteet muodostuivat aineettoman pääoman, pääosin uudistuvan ja uuden liiketoiminnan verkostojen mittaamisesta. Tutkimustuloksena voitiin havaita, että toimialatason keskeisimpiin ydinkyvykkyyksiin ja case-yrityksen linjaamiin menestystekijöihin pohjautunut tarkastelu onnistui tunnistamaan keskeisiä ongelmakohtia järjestelmätoimittajan mittariston suunnittelussa. Merkittävimmät toimenpidesuositukset ja laaditut mittariehdotukset painottavat asiakkaan prosessien tuntemista, oman osaamisen johtamista asiakkaan prosesseihin soveltuviksi, uusien innovaatioiden ja kyvykkyyksien luomista, erilaisten verkostojen tunnistamista ja kehittämistä, kyvykkyyksien johtamista ja tuotekeskeisen myynnin kehittämistä palvelukeskeiseen suuntaan. Tutkimus esittää näihin tuloksiin pohjautuvan mittariston ja prosessin aikana syntyneet mittariehdotukset.

The effectiveness of financial innovation support tools. Comparative study of Latvia and Finland

In the Innovation Union Scoreboard of 2011, Latvia ranked last amongst the EU countries in innovation performance. Even though there is sufficient scientific and technological basis, the results remain modest or low in most of the indicators concerning innovations. Several aspects influence the performance a national innovation system. In Latvia, the low effectiveness is often attributed to lack of financial support tools. As a comparison, Finland was chosen because of its well-established and documented innovation system. The aim of this study is to research the efficiency and effectiveness of the current financial innovation support tool system in Latvia from the point of view of an innovating company. It also attempts to analyze the support tool system of Latvia and compare to the relevant parts of the Finnish system. The study found that it is problematic for innovative companies in Latvia to receive the necessary funding especially for start-ups and SMEs due to the low number of grant programs, funds and lacking offer from banks, venture capital and business angels. To improve the situation, the Latvian government should restructure the funding mechanisms putting a bigger emphasis on innovative start-ups and SMEs. That would lay a foundation for future growth and boost research and scientific activities in Latvia.

Bisnesenkelien sijoituskriteerit aikaisen vaiheen yrityksiin

Diplomityössä tutkitaan bisnesenkelien sijoituskriteereitä aikaisen vaiheen yrityksiin. Työn tavoitteena on selvittää, mitkä ovat keskeiset tekijät, jotka vaikuttavat bisnesenkelien sijoituspäätöksiin aikaisen vaiheen yrityksiin. Työssä tarkastellaan myös bisnesenkelien sijoitusaktiivisuutta. Tutkimuksen tuloksena kävi ilmi, että sijoituspäätökseen vaikuttavat merkittävimmät tekijät olivat yrityksen ydintiimi, tuotteen tai palvelun innovatiivisuus, markkinoiden kasvu ja skaalautuvuus sekä markkinoilla oleva kilpailu. Sijoituskriteerien ymmärtäminen on keskeistä aikaisen vaiheen yritysten hakiessa ulkopuolista rahoitusta.