BUSINESS ANGEL NETWORKS AND THE DEVELOPMENT OF THE INFORMAL VENTURE CAPITAL-MARKET IN THE UK - IS THERE STILL A ROLE FOR THE PUBLIC-SECTOR

Business angel networks (BANs) provide a channel of communication betw een private venture capital investors (business angels) and entreprene urs seeking risk capital. Most operate locally on a not-for-profit bas is with their costs underwritten by the public sector. However, the re cent establishment of BANs by private sector organisations in the U.K. has led to a questioning of the government's continuing role in the f inancing of BANs. This paper demonstrates that there are significant d ifferences between public sector and other not-for-profit BANs and pri vate sector, commercially-oriented BANs in terms of the investments th at they facilitate. Private sector BANs are primarily involved with la rger, later stage deals whereas investments made through not-for-profi t BANs are generally smaller, involve start-ups and other early stage businesses and are local. The emergence of private sector BANs has the refore not eliminated the need for public sector support for locally-o riented networks.