The Art of Fundraising from Business Angels Based on Entrepreneurial Marketing: A New Insight

Raising financial resources is one of the main elements of the entrepreneurial process. Also, having access to capital is a challenging issue for entrepreneurs, and it is vital for venture creation and growth. Although there is a variance in access to early-stage finance in different countries, there is lack of such high-risk capital for entrepreneurial firms. Personal savings, friends, and family are usual financial recourses for entrepreneurs at the seeding and early-stages. But most entrepreneurs do not have such options, so angel investors who invest in risky ventures can play a key role in this regard. Entrepreneurs should offer their ventures in a desirable, attractive and persuasive way to encourage business angels to invest. Large information asymmetries between entrepreneurs and investors and the moral hazard problem are two fundamental problems which entrepreneurial financing situations are characterized with them. Information asymmetry is addressed by Signalling Theory and new venture legitimacy theory. We adapted a philosophical conceptualization method to propose that we would consider entrepreneurial marketing as new insights through which entrepreneurs can convince business angels and receive fund form them.