Angel funding and entrepreneurs' well-being: The mediating role of autonomy, competence, and relatedness

While external funding is indispensable for most entrepreneurs to scale their ventures, entrepreneurship literature highlights the additional benefits of investors' continued involvement, such as access to their expertise and network. Angel investors, whose primary value-add often emerges through their relationship with the entrepreneurs, generate particularly pronounced benefits. Entrepreneurship research has established that bringing angel investors on board comes at the cost of relinquishing partial equity, which restricts entrepreneurs' control over their ventures; however, the individual-level consequences of funding for entrepreneurs remain largely unexplored. To address this gap, we study how angels' funding and their post-investment involvement in the venture affect entrepreneurs' eudaimonic well-being in the long term. Drawing on self-determination theory, we explore further how the psychological need for autonomy, competence, and relatedness mediates the relationship between angel funding and entrepreneurs' well-being. Self-determination theory states that individuals' verbalized language reflects their needs; accordingly, we use Linguistic Inquiry and Word Count (LIWC) analysis on a unique dataset of almost 125 million words derived from the tweets of 1667 entrepreneurs on X (formerly Twitter). As hypothesized, we find a positive association between angel funding and entrepreneurs' well-being. Autonomy negatively mediates this relationship, while competence and relatedness mediate it positively. We advance research on entrepreneurs' eudaimonic well-being and extend the literature on self-determination theory and individual-level consequences of angel funding.