Key Variables

• BUSANGYY: Respondent is informal investor (as defined in BUSANG)

• BUSANG_A: Respondent is informal investor and reported an investment greater than zero
  

Almost every new business requires start-up funds. By asking the nascent entrepreneurs in the GEM sample how much money is required to start the firm, and how much they expect to contribute themselves, information is solicited that confirms that most entrepreneurs finance the startup themselves, either by putting in own financial resources or by lending sums of money from banks or other financial institutions. Another important source of money comes from individuals who invest in others’ business. They are indicated as “business angels” and “informal investors”, and consist of the “three f’s”: friends, family and foolhardy strangers. These informal investors are identified in the GEM survey via the following questions:

• Have you, in the past three years, personally provided funds for a new business started by someone else, excluding any purchases of stocks or mutual funds? {BUSANG}

• Approximately how much, in total, have you personally provided to these business start-ups in the past three years, not counting any investments in publicly traded stocks or mutual funds? {BAFUND}

• What was your relationship with the person that received your most recent personal investment?  {BAREL}