The role of the exit in the initial screening of investment opportunities: The case of business angel syndicate gatekeepers

Mason, Colin and Botelho, Tiago (2016) The role of the exit in the initial screening of investment opportunities: The case of business angel syndicate gatekeepers. International Small Business Journal, 34 (2). pp. 157-175. ISSN 0266-2426

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Abstract

The exit process has been largely ignored in business angel research.. The practitioner community identifies the difficulty in achieving exits as the most pressing problem for investors. This has been attributed to the failure of investors to adopt an exit-centric approach to investing. The validity of this claim is examined via a study of the investment approach of 21 ‘gatekeepers’ (managers) of angel groups in Scotland and Northern Ireland. Most gatekeepers say that they do consider the exit when they invest. However, this is contradicted by a verbal protocol analysis which indicates that the exit is not a significant consideration in their initial screening process. The small number of exits achieved by the groups is consistent with the general lack of an exit-centric approach to investing. Only three groups exhibit evidence of a strong exit-centric approach to investing. The lack of exits may have a negative impact on the level of future angel investment activity.

Item Type: Article
Uncontrolled Keywords: business angels,angel groups,exits,investment screening,verbal protocol analysis,co-investment funds
Faculty \ School: Faculty of Social Sciences > Norwich Business School
Depositing User: Pure Connector
Date Deposited: 04 Mar 2016 17:00
Last Modified: 24 Mar 2020 01:38
URI: https://ueaeprints.uea.ac.uk/id/eprint/57376
DOI: 10.1177/0266242614563419

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