Darian M. Ibrahim (University of Wisconsin Law School) has posted Building the Next Silicon Valley: The Role of Angel Investors in Economic Development on SSRN. Here is the abstract:
The success of California’s Silicon Valley has led other regions to attempt their own high-tech transformations, yet most imitators have failed. To build a start-up driven high-tech community, at least two base elements must be present: entrepreneurs and funding for their ventures. While some regions face a shortage of talented entrepreneurs, other regions may encounter a larger problem on the funding side. This Article reveals that angel investors, through their recent organization into professional investment groups, are now uniquely positioned to fund local entrepreneurs in non-tech regions. Unlike private venture capitalists, angel groups are found in all areas of the country and prefer early stage start-ups, and unlike state-sponsored alternatives to venture capital, angel groups have both the market incentives and expertise necessary to select and develop the best local entrepreneurs. Angel groups are only about a decade old, but given their advantages might be able to spur high-tech transformations in more regions in the future.
I recently saw Ibrahim present this interesting paper.