Corporate angels: A new breed of investors in the funding landscape for technology-based start-ups

This paper examines corporate angels, small businesses that provide equity capital directly to unquoted ventures and become minority shareholders. Corporate angels have been largely ignored in entrepreneurial finance research. This novel study examines corporate angels' investment practices, goals and challenges by means of a combination of qualitative cases and a survey of 87 corporate angels. From our analysis, we conclude that due to their knowledge and experience of technology and industry, combined with their active involvement in the investments, corporate angels can be an important source of seed and early-stage financing for technology-based start-ups, particularly with regard to technological and market knowledge and experience. Corporate angels' investment activity also leads to knowledge inflows to the corporate angel firms in terms of organizational and cultural development of the firms. With this paper we shed light on a new and unexplored investor group that is important in the changing landscape of entrepreneurial finance.