Why business angels reject investment opportunities: Is it personal?

Mason, Colin, Botelho, Tiago and Zygmunt, Justyna (2017) Why business angels reject investment opportunities: Is it personal? International Small Business Journal, 35 (5). pp. 519-534. ISSN 0266-2426

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Abstract

A major focus of research on business angels has examined their decision-making processes and investment criteria. As business angels reject most of the opportunities that they receive, this article explores the reasons informing such decisions. In view of angel heterogeneity, investment opportunities might be expected to be rejected for differing reasons. Two sources of data are used to examine this issue. Face-to-face interviews with 30 business angels in Scotland and Northern Ireland provided information on typical ‘deal killers’. This was complemented by an Internet survey of United Kingdom that attracted responses from 238 UK business angels. The findings confirm that the main reason for rejection relates to the entrepreneur/management team. However, angel characteristics do not explain the number of reasons given for opportunity rejection nor do they predict the reasons for rejecting investment opportunities. This could be related to the increasing trend for business angels to join organised groups which, in turn, leads to the development of a shared repertoire of investment approaches. We suggest the concept of ‘communities-of-practice’ as an explanation for this finding.

Item Type: Article
Uncontrolled Keywords: angel characteristics,business angels,entrepreneurial finance,investment decision,rejection
Faculty \ School: Faculty of Social Sciences > Norwich Business School
Related URLs:
Depositing User: Pure Connector
Date Deposited: 09 May 2016 16:00
Last Modified: 25 Nov 2020 00:37
URI: https://ueaeprints.uea.ac.uk/id/eprint/58608
DOI: 10.1177/0266242616646622

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