When angel-backed companies turn to crowdfunding: evidence from firm characteristics and business angels’ investment practices

This paper sheds light on the fundraising strategies pursued over time by entrepreneurial ventures, focusing on a still largely underexplored research issue: the decision of angel-backed ventures to raise funds through a follow-on equity crowdfunding (CF) round. We draw upon an original dataset of 217 Italian companies that received business angels’ (BAs) support over the period 2008-2018. The data examined indicate that a high level of monitoring activity by BAs negatively influences the probability of raising additional funds from a follow-on equity CF round. Conversely, BAs’ level of education positively influences the probability of completing a subsequent equity CF round. Interestingly, entering an accelerator program also does positively affect the latter probability. These results add evidence on the existence, under the right circumstances, of a complementarity relationship between different funding sources within the entrepreneurial ecosystem.