Are the business angels of today the venture capitalists of yesterday?

Abstract

The venture capital industries in the US and UK developed along similar lines, however, prior to the late 1980s a number of differences could be observed in their respective modi operandi. US venture capitalists concentrated their efforts on handson investment in new high technology ventures, while UK venture capital organizations focused on hands-off later-stage investments in consumer product and service industries. The early 1990s reveals that the investment orientations of the two industries have converged on later-stage investments in established companies to the detriment of business startups, particularly in high technology sectors. This paper argues that this trend has greater implications for UK high technology startups, since business angels, or informal investors, in the US are more readily available to fill the small high technology business funding gap than their counterparts in the UK.