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Crossing the chasm: The role of co-investment funds in strengthening the regional business angel ecosystem

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    Rights statement: This is an Accepted Manuscript of an article published by Taylor & Francis in Small Enterprise Research on 18 February 2018, available online: http://wwww.tandfonline.com/10.1080/13215906.2018.1428910.

    Accepted author manuscript, 946 KB, PDF document

Original languageEnglish
Pages (from-to)3-22
JournalSmall Enterprise Research
Issue number1
Early online date18 Feb 2018
Publication statusE-pub ahead of print - 18 Feb 2018


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.

    Research areas

  • co-investment fund, business angels, equity gap, risk capital market, policy, entrepreneurial ecosystem, Scotland

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