Angel diversity: studying the decision making criteria

Botelho, Tiago dos Santos (2017) Angel diversity: studying the decision making criteria. PhD thesis, University of Glasgow.

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Business angels are widely acknowledged as being a key source of risk finance for growth-oriented enterprises. Their importance has become even more significant since the onset of the financial crisis. Research on business angels goes back some 30 years, focusing primarily on two themes: (i) their characteristics and (ii) the investment process.
It has become clear that business angels are not a homogeneous population. Various studies have sought to develop typologies of business angels based on their personal characteristics, competence, motivations, investment approach and types of investment made. However, this stream of research remains limited and has not progressed beyond establishing typologies. Moreover, the possibility that typologies are dynamic, with angels shifting between categories over time remains largely unexplored. Neither has it been considered how different types of business angels approach the process of making investment decisions or managing the post-investment relationship. The aim of this research is to further develop this line of research on angel typologies to explore differences between types of angel investors in terms of their approach to investment, looking in particular, at their decision-making criteria.
This dissertation starts by questioning the methodologies used in research on business angel decision making. In particular, how comparable are results that arise from different methodologies. Using a sample of 51 business angels (21 gatekeepers and 30 individual investors), the findings indicate that the results are methodologically dependent. The next stage used data collected through an online survey with 472 investment decisions made by 238 angel investors. These data were used in the subsequent analysis. Firstly, a two-step cluster analysis procedure was conducted to cluster the investment decisions by the criteria weights. Three clusters were identified. The investment experience and the level of influence of others are both helpful in explaining the differences across groups. Secondly, the cluster membership was used to evaluate if angel investors change their investment criteria. A logistic model was developed. The results indicate that the likelihood of a business angel’s change the investment criteria depend on three key areas: investment specific area (ISA), angel specific area (ASA) and group specific area (GSA).

Item Type: Thesis (PhD)
Qualification Level: Doctoral
Keywords: Entrepreneurial finance, business angels, investment decision making, investment criteria, heterogeneity, typology.
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HA Statistics
H Social Sciences > HG Finance
Colleges/Schools: College of Social Sciences > Adam Smith Business School > Management
Supervisor's Name: Mason, Professor Colin and Chatzipanagiotou, Dr. Kalliopi
Date of Award: 2017
Depositing User: Mr Tiago Botelho
Unique ID: glathesis:2017-8083
Copyright: Copyright of this thesis is held by the author.
Date Deposited: 21 Apr 2017 14:01
Last Modified: 09 Jun 2017 08:03

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