FOR BUSINESSES seeking scale, the process of funding growth is often characterised as an escalator – with founders initially staking personal capital, then finding angel support, then venture capital, and ultimately accessing public markets. While arguably simplistic (the academic Paul Gompers, for example, has argued that different funding sources are more suited to some business models than others), the escalator is a useful concept for understanding how companies can successfully fund growth. Between 2001 and 2007, for example, 8 per cent of firms that achieved a Nasdaq listing had raised money from angels and venture capital in succession.
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To read the original article: Innovation Diary: Why it could take a network of angels to rescue startups’ faulty funding escalator | City A.M.
