Entrepreneurs’ human capital and the performance of angel-backed companies

This paper investigates the effect on startups' performance played by the joint interaction between entrepreneurs' human capital and business angels' contributions. Relying on data from the Italian Business Angels Network for 77 business angels backed companies and a counterfactual sample of non-business angel backed companies, we find that the entrepreneur's general and specific human capital is a major driver of the probability of being funded by business angels, which positively affects the venture's growth, but not its long-term financial performance. In brief, entrepreneurs' human capital is a major determinant of raising business angel funding, but it is the business angel contribution that constitutes a key driver for the startup's survival and profitability.