Abstract
Business angels are significant players in Europe's early-stage private investment market. They are contributing funds in bulk to meet the needs of innovative ideas and struggling new businesses. For this reason, BA development remains an important aspect of policy makers. Numerous factors, such as BA's personal characteristics, institutional factors, and macro economic factors, are crucial for BA's development. Using institutional and innovation theories, we propose that country's institutional development along innovation level are crucial for BA investment activity development. In addition, we belief that countries show divergence in their reliance on these factors to develop their BA markets. Our results of PCA analysis show that European countries reliance patterns are dissimilar on the factors of institutions (formal and informal) and innovation for BA development. However, PLS-SEM reveals that the institutional development and innovation level of a country both significantly contribute to develop BA markets. These results have important practical and policy implications.