What drives the active involvement in business angel groups? The role of angels' decision-making style, investment-specific human capital and motivations

Bonnet, Christophe; Capizzi, Vincenzo; Cohen, Laurence; Petit, Aurélien; Wirtz, Péter

doi:10.1016/j.jcorpfin.2021.101944

Cited by 21 publications

(11 citation statements)

References 94 publications

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“…Bonnet, Wirtz and Haon, 2013; Bonnet et al. , 2022; Cohen and Wirtz, 2022; Wiltbank et al. , 2009; Wirtz et al.…”

Section: Prior Research On the Role Of Psychological Attributes In Bu...mentioning

confidence: 99%

The Relationship Between Business Angels’ Psychological Attributes and Investments in Successful Portfolio Ventures: An Empirical Investigation Using Twitter Data

Altmeier,

Fisch

2023

British J of Management

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The psychological attributes of business angels are an important but understudied determinant of business angels’ investment behaviour. We derive hypotheses on how psychological attributes (i.e. clout, risk‐taking, analytical thinking) affect business angels’ investments in successful portfolio ventures. Our theorized mechanisms draw on cognitive biases (i.e. overconfidence bias, loss‐aversion bias, confirmation bias) to explain how business angels’ psychological attributes could affect their selection of portfolio ventures. Empirically, we perform a language‐based text analysis using Twitter data to gain insights into the psychological attributes of 1511 US business angels who made 5209 investments. Our results show that the psychological attributes of clout, risk‐taking and analytical thinking can indeed affect business angels’ likelihood of investing in portfolio ventures that successfully acquire follow‐on funding, highlighting the importance of psychological attributes in business angel investments.

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“…Bonnet, Wirtz and Haon, 2013; Bonnet et al. , 2022; Cohen and Wirtz, 2022; Wiltbank et al. , 2009; Wirtz et al.…”

Section: Prior Research On the Role Of Psychological Attributes In Bu...mentioning

confidence: 99%

The Relationship Between Business Angels’ Psychological Attributes and Investments in Successful Portfolio Ventures: An Empirical Investigation Using Twitter Data

Altmeier,

Fisch

2023

British J of Management

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“…On the supply-side, various policies could be implemented to bring in more investors, including: removing tax system obstacles; providing tax incentives; supporting the creation of co-investment funds; organizing investorreadiness training sessions; carrying out media campaigns (Antretter et al, 2020;Bonnet et al, 2021;Cusolito et al, 2020;Edwards and Todtenhaupt, 2020;Harrison, 2018;Gregson et al, 2017;Howell and Mezzanotti, 2019;World Bank, 2022).…”

Section: Policy Options To Support the Development Of Business-angel ...mentioning

confidence: 99%

“…Co-investment schemes also represent an added value for angels, because they lower the risk and allow more investments to be made. They therefore represent a win-win situation for business angels, managing public authorities and the companies benefiting from these investments (Antretter et al, 2020;Bonini et al, 2018;Bonnet et al, 2021).…”

Section: Policy Options To Support the Development Of Business-angel ...mentioning

confidence: 99%

Improving Micro-, Small and Medium Enterprise’s Access to Start-up Financing in ASEAN Countries

MARAN¹

2022

JoRIT

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Lack of access to finance constitutes a major setback to the development of the micro-, small and medium-sized enterprise (MSME) sector in the countries of the Association of Southeast Asian Nations (ASEAN). MSMEs are confronted with stringent funding constraints in traditional lending and capital markets, in particular at the early stages of their activity. Demand and supply of capital to MSMEs thus entails more complex issues compared to the larger firms. This paper presents a number of policy actions that have the potential to mitigate the financing challenges faced by MSMEs in ASEAN at the start-up stage by enhancing the potential of alternative funding sources such as business angel investment, crowdfunding, venture capital investment and SME stock markets.

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“…Second, it uses proxies – typically number of previous investments, length of time over which investors have been active, entrepreneurial experience – to measure knowledge, skills and competences, with the measurement often in the form of binary measures (e.g. Bonnet et al ., 2021; Capizzi, 2015; Collewaert and Manigart, 2016; Croce, Ughetto and Cowling, 2020). Third, the quantitative approach of these studies means that they are unable to indicate if and what angels are learning and whether it changes or enhances their investment capabilities.…”

Section: Introductionmentioning

confidence: 99%

“…Angels can learn from their prior investment activity, in particular by bridging cognitive gaps (Bonnet and Wirtz, 2012). This has been highlighted in relation to learning outcomes (Bonnet and Wirtz, 2012) and decision‐making processes (Bonnet et al ., 2021; Croce et al ., 2021; Franić and Drnovšek, 2019; Harrison, Mason and Smith, 2015). However, this literature has several significant limitations.…”

Section: Introductionmentioning

confidence: 99%

Business Angel Investment as an Informal Learning Process: Does Experience Matter?

Botelho

Harrison

Mason

2021

British J of Management

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This paper addresses the question of how the informal learning processes of angel investors shape the way in which they assess new investment opportunities. Previous research has suggested that angels learn from their previous investment activity. However, the measurement of investment experience as a function of years of investing and number of investments made does not take into account how, and to what extent, learning occurs and how it impacts investors' decision-making. To address this deficiency, we suggest a dynamic model of informal learning which incorporates the informal learning typology developed by Schugurensky and extended by Bennett, as a conceptual framework to understand how learning experiences impact angel investment decisions. Based on interviews and verbal protocol analysis with 30 investors, we demonstrate how learning impacts learning processes and outcomes as angels assess an investment opportunity. The findings highlight the importance of supporting angel learning with support for angel groups and angel training programmes.

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What drives the active involvement in business angel groups? The role of angels' decision-making style, investment-specific human capital and motivations

Cited by 21 publications

References 94 publications

The Relationship Between Business Angels’ Psychological Attributes and Investments in Successful Portfolio Ventures: An Empirical Investigation Using Twitter Data

The Relationship Between Business Angels’ Psychological Attributes and Investments in Successful Portfolio Ventures: An Empirical Investigation Using Twitter Data

Improving Micro-, Small and Medium Enterprise’s Access to Start-up Financing in ASEAN Countries

Business Angel Investment as an Informal Learning Process: Does Experience Matter?

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