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Abstract
In this paper we provide a detailed profile and analysis of the regional risk capital market in Scotland, using an innovative methodology and specially developed databases which cover risk capital investment in young companies in the periods 2000–04 and 2005–07. This identifies the investment activity of all actors in the market and provides estimates of the total flow of risk capital investment into early-stage Scottish companies over the period. The paper concludes by drawing out the implications for policy makers (providing a more robust evidence base for the development, implementation and monitoring of policy) and for academic researchers (on the methodologies for estimating market scale and efficiency).
Acknowledgements
This paper draws on a series of analyses of the risk capital market in Scotland funded by Scottish Enterprise (Don and Harrison Citation2006; Johnston, Greig, and Harrison Citation2008). All opinions expressed are those of the authors alone, writing in a personal capacity, and should not be ascribed to the sponsor.
Notes
1. Figures for each year will therefore be slightly short of the total number of investments given in .
2. This company subsequently closed in 2009.
3. Other research studies suggest that angels allocate 5–10% of their portfolios to angel activity. These analyses exclude the value of principal residences, pension funds and the value of retained business assets. Making allowances for these definitional differences, the two estimates are relatively congruent in practice.