Abstract
Government intervention to improve the supply of early stage risk capital has taken a number of forms, the most recent of which is the establishment of public/private co-investment funds. This paper provides a detailed case analysis of the earliest such fund, the angel-led Scottish Co-Investment Fund. The fund as a pari passu investor alongside private sector investors, has had a number of key impacts on the risk capital market in Scotland: business angels account for 73% of all transactions; SCF has leveraged additional funds into deals; SCF allows investors to consider larger deals and commit to follow-on deals than their liquidity and investment preferences would otherwise allow; SCF plays an increasingly important role in the development of those ventures who would otherwise struggle to attract institutional VC; and it has stimulated the organisational transformation of the business angel market in Scotland into one dominated by business angel groups and syndicates.
| Original language | English |
|---|---|
| Pages (from-to) | 3-22 |
| Journal | Small Enterprise Research |
| Volume | 25 |
| Issue number | 1 |
| Early online date | 18 Feb 2018 |
| DOIs | |
| Publication status | E-pub ahead of print - 18 Feb 2018 |
Keywords / Materials (for Non-textual outputs)
- co-investment fund
- business angels
- equity gap
- risk capital market
- policy
- entrepreneurial ecosystem
- Scotland