Business Angels Research Articles

Signaling sustainability: Can it entice business angels' willingness to invest?

AbstractDespite increasing attention to sustainability as a source of new business opportunities, current research on new ventures has hardly considered this factor with respect to access to funding. This paper examines the role of new venture sustainability signals on business angels' willingness to invest. Specifically, it considers the effects of third‐party sustainability certification and the self‐proclaimed label of sustainable entrepreneurship as congruent reputational signals for inducing angel investors' willingness to invest. Three studies were conducted using a 2 × 2 between‐subject experimental design on certification and label conditions, respectively, in two samples from the Amazon MTurk crowdsourcing marketplace and one from business angels. Results show that early‐stage ventures would use such signals in their sustainability exemplification strategy to convey quality and prestige and eventually improve their chances of raising business angel funding. Implications for theory and practice are discussed.

What's in it for me? The perceived investment value of business angels

Besides the extraordinary impact of Business Angels (BAs) as the leading contributors to fund entrepreneurship at the early stage, the value BAs perceive from their investment activity has not yet been fully explored. Based on a new holistic perspective resulting from marketing and consumer behaviour, this article builds on the concept of perceived investment value to create a new instrument that measures the overall value perceived by BAs in their investing activity. Data were collected through a survey questionnaire with 849 BAs from 79 countries. The instrument created was tested through Structural Equation Modelling. The results reveal that: (i) BAs are not purely financial investors and expect more than just money from their activity, as self-esteem, entrepreneurship, emotion and altruism are the main dimensions that explain angel perceived investment value (APIV), with economic and functional dimensions being the least influential; (ii) APIV positively influences their job satisfaction; and (iii) angels satisfied with their jobs are more likely to reinvest their money and engage in positive word-of-mouth. A multigroup comparison was implemented, validating the results for males and females, novices and veterans and light and heavy investors.

Evaluation of startups through Internet platforms

The situation in the venture capital market is continually changing, as evidenced by the statistics on the use of venture investment pools. Experienced investors, reducing their risks, give preference to firmly established startups that are at intermediate and late stages of development, as well as those in the sphere of IT development and high technologies. This approach leads to a situation when investors do not notice quite a number of interesting, impressive and promising projects at their early and seed stages. In this regard, it is relevant to consider some methods aimed at the evaluation of startups at different stages of their development. The traditional methods of evaluating projects with no operational history are not suitable. The instruments for preparing startup business plans as well as discounting and compounding tools are relevant up to the entry point of the search for financial resources. In a real situation, a perspective innovative startup risks to be taken over as a result of the only available way of mobilising resources – through the inclusion of investors in the startup owners (shareholders) pool. Other traditional sources – internal funds and bank loans – limit a startup’s resource, most often at the seed stage, due to their limited scope and high cost of borrowed capital. As a rule, the borrowed capital in the form of bank loan is basically unavailable for startup initiation due to no ways to ensure repayment guarantees, while the possibility of relying on a business plan for a startup in the process of raising bank funds is a common misconception. In recent years, the impact of the development of specific Internet resources on the structure of investment in economy has been tangible. In addition to innovative ideas in entrepreneurship, a number of instruments specific of new processes in investing are being realised. Business angels, accelerators, startup-oriented Internet resources are shifting to the mechanisms of remote assessment of startup potential and its subsequent funding.

Filling successive technologically-induced governance gaps: Meta-organizations as regulatory innovation intermediaries

Successive digital innovations create technologically-induced governance gaps that make public regulation quickly obsolete and that might be filled by sectoral governance. The literature has shown that most sectoral governance happens at the level of meta-organizations, organizations whose members are themselves organizations, although we lack a temporal understanding of this phenomenon. Further, while regulation is generally understood as a salient function of innovation intermediaries, the literature on innovation intermediaries has focused mostly on other functions such as idea sourcing, knowledge sharing, or capacity building. We know relatively little about regulatory innovation intermediaries, especially how they might evolve in response to the emergence of technologically-induced governance gaps. In this paper, we conduct an in-depth case study of the evolutions of the FinTech sector in France over almost 30 years, using more than 3000 min of interviews, 4500 pages of archives, and non-participant observations. We study three successive (non)digital financial innovations: business angels, crowdfunding platforms for SMEs, and blockchain technologies. We develop a meta-organizational analysis to investigate meta-organizations as regulatory innovation intermediaries. We describe the evolutions and interrelations of new technologies and meta-organizations, and unpack mechanisms of meta-organizational capacity building for multiple contributors, effects of innovation on organizationality and trajectories of meta-organizational filiation.

Gender diversity effects on investment decisions: a study of Shark Tank

PurposeThis paper investigates gender disparity in investment decisions within the popular American TV show Shark Tank.Design/methodology/approachThe research uses a comprehensive dataset of 925 pitches from 14 seasons and 316 episodes, covering August 2009 to May 2023.FindingsContrary to previous studies, the findings indicate that female entrepreneurs do n'ot face discrimination in terms of their pitching success rates, regardless of their industry affiliation. However, the authors did observe that female entrepreneurs tend to receive lower valuations, both self-assessed and in final deals. This suggests a self-imposed gender gap in venture capital and angel investing, likely stemming from lower entrepreneurial aspirations among women.Originality/valueTo tackle this issue, the authors propose promoting female venture capital by increasing the representation of female entrepreneurs and business angels on Shark Tank. Such role models can inspire aspiring women in these fields. Additionally, the authors believe that mixed-gender founder teams, comprising both men and women, can play a significant role in developing promising startups with viable business models.

Business angels investing in green ventures: how do they add value to their start-ups?

ABSTRACT This study investigates how business angels (BAs) add sustainability value to green ventures and how these value-adding activities are dependent on the BAs’ sustainability characteristics, i.e., motivation to invest, sustainability competence, and sustainability investor activity. This explorative qualitative study is based on interviews with 14 BAs from Germany and the Nordics. A cross-case analysis of the interview data reveals that different groups of BAs invest in green start-ups: green angels and light green angels. These BAs differ in their motivation for investing in green start-ups, with some wanting to contribute to the sustainability transition and others investing to be a part of the shift of capital and talent toward green ventures. The BAs offer different sustainability-value-adding activities to their start-ups. Green angels provide activities that are aimed at enhancing the sustainability performance of their investees. Light green BAs add value very similar to conventional BAs. This study contributes to the green entrepreneurial finance literature by exploring the specificity of green angels. By shedding light on how BAs add sustainability value as investors for green ventures, the study places green angels more distinctly in the ecosystem of early-stage financing for green start-ups.

New Venture Sustainability: Signaling Effects on Business Angels’ Willingness to Invest

New Venture Sustainability: Signaling Effects on Business Angels’ Willingness to Invest

Religious Values and Business Angel Investment The influence of the Jewish Ethos Tikkun Olam (WITHDRAWN)

Religious Values and Business Angel Investment The influence of the Jewish Ethos Tikkun Olam (WITHDRAWN)

Business Angels & Entrepreneurial Intentions of Management Students in Pakistan

This empirical paper's goal is to analyze management students' entrepreneurial desire at Pakistani universities and to solicit funding from business angels. This was a quantitative study and data was collected from 230 management students in Pakistan, 68% of whom were female and 33% of whom were male, and it was broken down using SPSS and AMOS using a questionnaire containing 23 items on a 5-point Likert scale. The study mainly claimed that perceived behavioural control, cultural norms, and entrepreneurial education all have a favourable impact on entrepreneurial intention. This research can assist students who have start-up ideas but lack the necessary funding and it may push students with motivation. However, it only provides a snapshot of university students in a single country at the time and the author did not highlight the study's qualitative component, which would have boosted the efficiency of mediators or moderators. This document gave the perspective to business owners of Pakistan that they might start new associations with business angels' help.

DEVELOPMENT OF CORPORATE VENTURE CAPITAL UNDER THE CONDITIONS OF INTENSIFICATION OF INNOVATIVE ACTIVITY

In recent years, corporate venture capital has gained popularity in all areas of the economy in different countries of the world. Along with traditional venture capital funds, business angels and accelerators, traditional corporations also invest in startups around the world. Most often, these processes take place according to the corporate venture capital model. This makes it possible to remove restrictions on the participation in corporate venture funds mainly of legal entities, will open up opportunities for the participation of various subjects in corporate venture funds, and promotes the investment of funds in innovative structures. The purpose of the article is to analyze corporate venture capital, to identify structural characteristics of corporate venture capital and peculiarities of corporate venture investing in Ukraine. During the research, the method of synthesis and analysis, induction (in the study of corporate venture capital, structural characteristics of corporate venture capital and peculiarities of corporate venture investing in Ukraine); the method of schematic, graphic images (for the visual display the received results of the study) has been used. The main structural characteristics of corporate venture capital have been singled out. The signs of structural characteristics of corporate venture capital include the parameters of the corporate venture capital investment model, the types of corporate venture investment goals, criteria for deciding on financing a startup for investors and analysts of corporate investment funds, the types of corporate venture capital investments, the main motives for investment by corporate venture capital funds, ways to promote business growth through corporate investment in venture capital funds, the main financial parameters of the sustainability of corporate venture capital. Ukrainian investors appeared in this field literally 5-7 years ago, but their interest in global international startups is already marked. It was established that for Ukrainian businessmen venture investments at the stages of the B+ series are a new stage of expansion of the investment portfolio. The amount of investment depends on the investor's faith in the project and the arrogance and talent of the startup. If «seed» and «angel» investments are calculated on average in hundreds of thousands of dollars, then capital investments in the innovative business are measured in millions and tens of millions. The main goal of corporate venture capital is strategic innovative business development. Activation of activity through corporate venture capital investments in Ukraine is only developing, and much depends on the business reputation and personal characteristics of managers. Ukraine's economy needs integration into global economic processes through the development of corporate venture capital.

Bibliometrically mapping the research field of entrepreneurial communication: where we stand and where we need to go

AbstractEntrepreneurial communication is vital for acquiring resources and building stakeholder relations in startups. This research stream has grown rapidly in recent years and has developed as a multidisciplinary field at the interface of communication and entrepreneurship. However, this rapid development and the plethora of associated perspectives have led to a diverse and fragmented research field with different foci and concepts, making structural overviews difficult. Against this background, we conducted a bibliometric analysis to uncover the hidden structure of previous entrepreneurial communication research and to guide scholars toward a future research agenda. First, we identified 383 articles via the Scopus database, published in 245 academic sources, that covered nearly 50 years of research. We then connected the results of previous research using co-occurrence analysis and a thematic map to highlight the intellectual structure of the field and offer insights into its research clusters. Our algorithmic historiographic analysis illustrates the development of the field over time and highlights upcoming topics. Overall, entrepreneurial communication is crucial, particularly for startups engaging in resource acquisition for employee and investor relations with venture capitalists and business angels.

OBILJEŽJA NEFORMALNOG RIZIČNOG KAPITALA U ČEŠKOJ: KVANTITATIVNO ISTRAŽIVANJE

In this paper, the demographic and investment profiles of business angels operating in the Czech Republic are evaluated based on a sample of 78 angel investors. This is the first attempt to use data on investor activities from the Pitchbook database, which has become increasingly popular in academic research. Beyond the framework of descriptive statistical analysis, a multidimensional statistical investigation using cluster analysis was conducted. The results show that there are two groups of angel investors in the Czech Republic. The first group is represented by investors who predominantly have a large active portfolio, as well as the number of total completed investments. On the other hand, the second cluster is made up of investors who conduct a smaller number of investments and are also in the position of the founder of a start-up. Not surprisingly, there are two main locations of angel investors in the Czech Republic, Brno and Prague. Both categories of typical investors are united by some demographic characteristics; for example, the market is dominated by middle-aged men with a completed Master’s degree in Economics who invest in start-ups in the field of information and communication technologies. The main contribution of the paper consists in evaluating the demographic and investment profiles of angel investors operating in the Czech business environment. The results of the research have implications for upcoming research, the informal venture capital industry, and public policy beyond the Czech business environment, while developing tools for fostering an angel ecosystem. In today’s globalized world, the boundaries of angel investors are often blurred. Just as start-ups have ambitions to expand internationally, informal venture capitalists are increasingly making cross-border deals. From the perspective of both investee firms and policy makers, it is thus important to know the profiles of not only domestic but also foreign business angels, e.g. with regard to the setting of public support for foreign capital inflows.

FACTORS FOR THE FORMATION OF FINANCIAL SECURITY FOR THE DEVELOPMENT OF DOMESTIC ENTERPRISES ON THE BASIS OF INNOVATION

Attention has been updated to the problems of forming financial support for the implementation of investment and innovation projects of enterprises, which aim to ensure their innovative development. Therefore, the purpose of the study is to identify the composition and analysis of the factors of the formation of financial support for the development of enterprises in Ukraine on an innovative basis. A typology of the factors of attracting financial support for investment and innovation goals was carried out in two directions: (1) internal resources and capabilities of economic entities, (2) external sources of accumulation of financial resources. Among the internal factors, the influence of such as the financial and economic condition, results and business activity of enterprises, availability of internal investment capital, innovative and technological activity of business entities, financial security and protection of intellectual property objects of innovatively active enterprises was analyzed. According to external factors, such as the development of the financial and credit system of the region, the activities of venture funds, business angels, the state of development of innovative infrastructure and the business environment were analyzed. The conditions that determine the specified factors of financial support for the innovative development of domestic enterprises are characterized, as well as their current state and the main problems that prevent the full involvement of financial and investment assets sufficient for the full-fledged conduct of innovative and technological activities by economic entities of Ukraine are identified. The scientific novelty of the research results lies in the further development of the methodological and applied principles of classification and typology of the factors of the formation of financial support for the activation of innovative activities of enterprises. The applied value of the research results lies in the possibility of identifying the available factors for the formation of financial and investment support for innovative and technological growth of business entities.

Managing a high-tech startup: A case of machine vision for the poultry industry

High-tech startups face a number of insurmountable problems that prevent them from turning innovative ideas into new products. The article investigates the managerial aspects of implementation and commercialization of high-tech startups in Russia using the case of an automated computer vision analytical system for industrial poultry farming. Entrepreneurship theory and the concept of strategic management constitute the theoretical basis of the study. Among the research methods used in the paper are the POCD framework in combination with SWOT analysis involved in the formation of startup management strategies, as well as Sandelovsky and Barroso’s Meta-Synthesis method applied to identify factors that determine the successful implementation of a startup. The empirical evidence of the work was a bank of video data collected at the VNITIP Federal Research Center of the Russian Academy of Sciences and covering the full life cycle of broiler chickens. The paper established three main sources of funding for high-tech start-ups to introduce machine vision systems in the poultry industry: the state, industrial corporations, and venture capital. At that, none of the enterprises, including the global leaders, has yet reached the IPO stage. We identify two central lines to launch and commercialize a Russian start-up in poultry farming, these are association with developers of integrated digital solutions and/or integration with poultry meat producers. Recommendations are formulated regarding the implementation of a high-tech start-up: to form a public-private partnership, actively interact with research centers and universities, cooper ate with business angels, expand the entrepreneurial competencies of startupers, and clarify the business model of the project. The mass introduction of machine vision technology in the poultry industry is possible due to the acceleration of technological progress and the elimination of the main obstacle, i.e., the high cost of components for machine vision systems.

Creation Experience of Startup Campuses in Major Regions (North America, Far East, Australia and Europe)

Startup campuses are a gathering place for local startups. On the one hand, they bring together innovative startups, and on the other hand, they offer solutions for international market entry through various incubator programmes, investment services, training networks, education, extensive networking capital, and mentoring. Startup campuses should be seen as a 21st century combination of decentralised incubators, accelerators, and business angels. The world’s leading startup and innovation campuses recognise the need to build the right environment and ecosystem for startups to grow quickly and efficiently. Among the startup campus ecosystems, the US Silicon Valley stands out, home to seven of the world’s top ten startups. Currently, five large startup ecosystems (New York, London, Beijing, Boston, and Shanghai) have the best business development capabilities, and two are trying to catch up (Los Angeles and Tel Aviv). Among startup ecosystems, the US leads the race by a significant margin, but European startup campuses are also growing steadily, while South American startup incubators are lagging behind. The study seeks to find out what services startup campuses provide in different regions, what their main activities are, and how successful they are. The topic is also important because startups most often respond to broad societal problems, such as access to basic services at affordable prices, reducing poverty and inequality, and increasing diversity and inclusiveness. On environmental issues, the most common targets are improving food supply and security, clean energy, climate change solutions, water, and sanitation.

Do Global Competitiveness, Cultural Resistance and Capital Financing Drive Value Creation?

Purpose: While value creation has long been a target for most economies of the world, only recently have certain macroeconomic and socio-economic practicalities been discovered to play key roles in propelling value creation. Amazingly, this is a topical theme characterized by a rareness of both theoretical and empirical researches. Thus, the aim of this paper is to assess whether microeconomic and socio-economic practicalities (what has been termed as global competitiveness, capital financing and cultural resistance) drive value creation. Theoretical Framework: The theoretical framework is hinged on the resource-based theory of value creation, which emphasizes the roles financial (capital financing), social (cultural) and human resources play in driving entrepreneurial activities or value creation Design/Methodology/Approach: Three specific types of drivers of value creation are considered; the first being global competitiveness and the others being capital financing and cultural resistance. Using a cross-sectional research design, 545 respondents in six regions in Nigeria were examined to obtain their perceptions on the most relevant driver of value creation. Findings: Result of the approximation chi-square support the factorability of correlation matrix and suitability of the identified variables as drivers of value creation. The factor and principal component analyses showed that while the other two drivers (global competitiveness and cultural resistance) matter for value creation, capital financing was found to be the most relevant driver for value creation, thus reflecting how poor funding of entrepreneurial activities dissuaded value creation. Research, Practical and Social Implication: The study shows that global competitiveness, cultural resistance and capital financing are major drivers of value creation. Originality/Value: The value of the study is vital to governments such that governments and business angels should strive towards offering value creators with adequate funding to steer entrepreneurial activities.

Business angels and firm performance: First evidence from population data.

Business angels dominate early-stage investment in firms, but research on their effects on firms is scarce and limited by sample selection. To address sample selection, we propose using population data and we develop an algorithm for identifying business angel investments in such data. We illustrate this novel approach by applying it to detailed and longitudinal total population data for individuals and firms in Sweden. In our application, we focus on a subset of business angels-active business angels who are themselves successful entrepreneurs with a profitable exit. We then study active business angels' effects on firm performance, using population data. Employing a quasi-experimental estimator, we find that the business angels invest in firms that already perform above par. There is also a positive effect on subsequent growth compared with control firms. However, contrary to previous research on business angels, we cannot find any impact on firm survival. Overall, the paper underlines the need to address sample selection when studying business angels and suggests using population data for identification.

Retrospective analysis of the Russian venture capital market

Subject. The article investigates the Russian venture capital market. Objectives. The purpose is to underpin the advantages of using venture funds in financing innovations based on a retrospective analysis of the Russian venture capital market. Methods. The study employs general scientific and special methods of scientific cognition, such as systems and comparative analysis, functional-structural and retrospective analysis. Results. I analyzed the venture capital market in Russia for 2017–2022 and defined the main directions of the venture financing growth, unveiled the features of the use of venture capital, and specified the problematic moments of its development. Conclusions. The retrospective analysis of the Russian venture capital market for 2017–2022 demonstrated the need for further State support to venture activities to create conditions for a technological breakthrough of the domestic economic system, the relevance of replacing imported technologies and products with domestic ones. The paper determines that under the influence of external threats, private investors have become new drivers of the Russian venture capital market. Thus, most of the transactions were made with the participation of business angels, 70% of which are syndicated transactions, including those involving professional communities of business angels. In the first half of 2022, there was an increase in the share of early-stage transactions. This is a positive trend, as it will enable investors to enhance the technological independence of Russia through investing in promising projects.

The Interest Shown by Potential Young Entrepreneurs in Romania Regarding Feasible Funding Sources, in the Context of a Sustainable Entrepreneurial Education

Among the most important factors that favor the development of a sustainable business environment are the sources of financing and the skills developed by the higher education system, according to recent studies. To align with these, several universities have started providing entrepreneurship knowledge. Are these sufficiently well-known by the students in Romania? The current paper aims to carry out an in-depth analysis of concepts. The primary objective of this study is to explore the most relevant sources of entrepreneurial financing in the context of a sustainable entrepreneurial higher education. For such an endeavor, quantitative research was conducted, being designed and distributed through a questionnaire. Data were collected from a sample of 285 students of Transilvania University in Brasov interested in entrepreneurship. Results indicate that the main sources of entrepreneurial financing are retained earnings/profit, personal sources, supplier credits, European funds, loans (bank credits), leasing, and business angels. Evidence shows that most respondents assert great confidence in European funds. Notably, the entrepreneurial qualities of the founder are one of the enablers of a successful and sustainable business. Additionally, this research opens new ways of collaboration between the academic and the business environment to better train future professionals in the economic field.

50 Shades of Green—Angel Investing in Green Businesses

Entrepreneurs will play a critical role in developing the technological solutions to achieve a successful transition to net carbon zero. Their ability to develop these innovations into market ready products requires access to finance. Angels play a critical role in financing the start of the entrepreneurial pipeline. However, their actual and potential role investing in green/clean businesses is not considered in either the business angel or socially responsible investment literatures. This article addresses this omission. It asks what motivates business angels to invest in green/clean tech businesses and how the weight of green/clean tech in their portfolios impacts the motivations to invest in this sector. Based on interviews with 65 investors, we show that the motivation of business angels for investing in green/clean tech opportunities differs according to the proportion of their investment portfolio that comprises green/clean tech investments. Those angels who invested solely in green/clean tech gave a higher weighting to economic motivations and lower weightings to Altruistic and Hedonistic motivations. Angels with less exposure to green/clean tech in their portfolios gave a higher weighting to Altruistic motivations and had lower weightings for economic and hedonistic motivations. Our findings have implications for policy-makers and to green entrepreneurs.