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A number of studies concerning informal investors have been carried out over the last two decades. One main conclusion from previous research has been that the informal venture capital market is very heterogeneous, and that classi® cations for informal investors are needed in order to more accurately depict the informal venture capital market. In this paper we propose that the market could be divided in accordance with the informal investors' investment activity and competence. The study is based on a sample of 425 active informal investors, divided into four diÚ erent categories: (1) Lotto investors; (2) Traders; (3) Analytical investors; and (4) Business angels. The empirical ® ndings show that there are considerable diÚ erences between the four categories of informal investors; diÚ erences regarding the information sources used, the level of ® rm involvement, co-investing, investment horizons, and geographic preferences, to name some examples. As a consequence, each of the various informal investor types responds diÚ erently to private and public prospects or motivators. It is suggested, therefore, that the informal venture capital market could be more eÚ ectively analysed and depicted by using the proposed classi® cations and applying diÚ ering measures to each informal investor category.

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PurposeThe main aim of this article is to widen one's understanding of the value‐added contributions of business angels and, more specifically, their role as facilitators for further finance.Design/methodology/approachThis article is based on in‐depth case studies of five experienced business angels. Data were collected by using a loosely structured interview guide which focused on the investment process.FindingsBusiness angels add value besides the initial financial capital offered, typically in the form of strategic advice and networking. However, previous research has to a small extent examined the role of business angels as facilitators for further finance. The empirical findings in this study indicate that experienced business angels play a key role in order to facilitate further finance. Furthermore, entrepreneurs should bear in mind that the previous track record of the business angel strongly affects if and how they can facilitate further finance. Thus, active business angels can be viewed as a part of the entrepreneurial team, hence reducing the “liability of newness” for the entrepreneurial firm.Research limitations/implicationsFuture research should continue to examine business angels by using insight from social capital theory. Moreover, by using larger samples the findings from this exploratory study can be tested, thus getting more reliable results to extend one's knowledge about how business angels act as facilitators for further finance.Originality/valueThis study suggests that concepts from social capital theory seem to be viable when examining how business angels work when they are securing further finance for their portfolio firms.