Abstract
Taking into account the growing need to expand and diversify the forms of business financing in Ukraine, especially in the early stages, it is necessary to pay more attention to the study of business angels investment. For the success of the start-up, at least there should be an original idea with a development perspective, the owner of this ingenious idea and investors, which may be business angels. In this regard, the activities of business angels are interesting for study and research. The subject of research of the article is “angelic” investments as a special form of business financing. The goal is to explore the essence and to analyze the peculiarities and trends of business angels investment as a special form of business financing. The objective is to research peculiarities and current state of business angels investments in Europe and in Ukraine. Methods: system analysis is used to determine the peculiarities of development of business angels investment in European countries; trend analysis– to predict future total of business angels active in early-stage investments in Europe. The following results were obtained: classification of business angels by different scientists were provided; the main areas of early stage investment in Europe, dynamics of business angels investment, number of business angels in Europe were analized; the main problems faced by Ukrainian angels and trends of business angels investment in Ukraine were systematized. Conclusions: the analysis of the peculiarities and trends of business angels investment as a special form of business financing in Europe can be efficiently used in early stage investment as recommendations for using non-traditional sources of financing in Ukraine.
Highlights
Business angels are natural persons who provide equity financing for young enterprises and gain ownership in them
They provide strategic support to the companies from investment to exit, they can increase their survival in the market significantly
The European Business Angel Network (EBAN) describes these organizations as the association of angels, who share the risks for the sake of making larger scale and more profitable investments by uniting their experiences, competences, financial and human capital
Summary
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. 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. Business angels make decisions based on their managerial-entrepreneurial experiences and their insight into human nature and the evaluation process takes a relatively short time In their evaluation, informal venture capital investors as well as institutional venture capital investors take the emphasis on the future growth and development prospects of the companies and the past performance plays a less important role. Informal investors have altruistic motivations and it can be important for them to gain the respect of the local community (Makra, 2004)
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