Informal Private Equity Investment Networks: The Role of the Nexus Angel

Abstract

Start-up entrepreneurs seek private equity funding from angel investors, but these investors are notoriously hard to identify, preferring to remain hidden from view. This article identifies and examines a special category of angel investors who appear to provide the entrepreneur access to these hidden investment groups. The authors describe how to find these investors, termed nexus angels, and explicate their motivations and behaviors pre- and post-investment, providing a look into the inner workings of these shadowed angel groups. They discuss how nexus angels can help entrepreneurs get angel funding and provide the entrepreneur the support and advice necessary to attract additional capital and help grow the entrepreneur’s business.