Business angels: academic, practice and policy contexts

Researchers have been investigating the phenomenon of angel financing for almost 40 years, however, few studies investigate business angels in the Australian context. This thesis presents an examination of business angels through three research papers focusing on academic, practice, and policy. This triumvirate identifies what we know about business angels - the academic - how they make decisions - the practice - and, finally, the interaction of government and business angels - the policy. This 'academic, practice, policy' model is formed into a coherent piece of work using a critical research perspective framework, providing insight, critique, and transformative redefinition. The first paper, the academic, provides a structured literature review of 84 business angel articles published between 2000 and 2013. The paper identifies what scholars know about angel financing and provides a new research agenda. This agenda calls for future research to focus on six key areas of angel financing - policy, crowd sourced investing, the changing nature of angel markets, gender issues, entrepreneurs, and emerging markets. The second paper, the practice, investigates the decision-making process of business angels using the Australian context to identify the underlying motivating factors of the investment decision. The paper uses qualitative research interviews with angels which are corroborated by interviews with other actors in the ecosystem. Using an analytical framework that combines the decision-making process with investment criteria, the paper identifies four key drivers motivating the investment decision - personal experience, trust, the need to contribute, and realistic expectations. The third paper, the policy, examines the perspectives of both investors and policy makers in the Australian context. The paper introduces policy theory to frame the analysis - adopting a problematisation approach - allowing for a critique of the implementation and effectiveness of government intervention. In adopting this approach, a disconnect between investors and government is clearly identified. Alongside this theme, the paper identifies a number of new behaviours not seen in the literature. These include the use of diversification to manage risk, and the provision of human and social capital without financial capital - 'sweat equity'. This thesis aims to stimulate a wider discourse about angel financing and the behaviour of angel markets more broadly. It encourages the reader to think about what they know from a new perspective. Using the three empirical papers, and adopting a view of research as a process, this thesis discusses three interwoven spheres of insight - the changing nature of angels and angel markets (academic), micro issues - human and social capital (practice), and, macro issues - actor engagement (or market organisation) (policy). The subsequent critique of these spheres gives rise to new investor archetypes, questions the extent of angel human and social capital, and discusses the fragmentation of the Australian angel finance market. The thesis concludes with transformative redefinition to identify ways of rethinking angel financing. This concluding section motivates a broader discourse on angel financing, identifies hidden complexities, opportunities for alternative understandings, and prompts a rethinking of what we know about angel financing. Rethinking our understanding of what exists enables us, as scholars, to build on what we know and refine our understanding even when this is a continuing struggle that includes much practice and frequent false starts.