IDEAS home Printed from https://ideas.repec.org/a/sae/entthe/v22y1998i4p23-42.html
   My bibliography  Save this article

Do Serial and Non-Serial Investors Behave Differently?: An Empirical and Theoretical Analysis

Author

Listed:
  • Mark Van Osnabrugge

Abstract

This research investigates the differences between experienced private investors (‘serial angels’) in the UK, who have funded three or more unquoted ventures, and their less experienced counterparts (‘non-serial angels’). Using a theoretical base and data on 141 business angels, this study tentatively concludes that, relative to non-serial angels, serial angels may be less concerned with agency risks and more concerned with market risks. In particular, serial angels limit their investments more to (and conduct slightly more research on) industry sectors in which they have personal experience, prefer markets with less competition, choose to co-invest, are slightly less involved in their investments, and are less concerned with the location of the venture.

Suggested Citation

  • Mark Van Osnabrugge, 1998. "Do Serial and Non-Serial Investors Behave Differently?: An Empirical and Theoretical Analysis," Entrepreneurship Theory and Practice, , vol. 22(4), pages 23-42, July.
    • Handle: RePEc:sae:entthe:v:22:y:1998:i:4:p:23-42
    DOI: 10.1177/104225879802200402
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/104225879802200402
    Download Restriction: no
    File URL: https://libkey.io/10.1177/104225879802200402?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Carter, Nancy M. & Williams, Mary & Reynolds, Paul D., 1997. "Discontinuance among new firms in retail: The influence of initial resources, strategy, and gender," Journal of Business Venturing, Elsevier, vol. 12(2), pages 125-145, March.
    2. James O. Fiet, 1995. "Risk Avoidance Strategies In Venture Capital Markets," Journal of Management Studies, Wiley Blackwell, vol. 32(4), pages 551-574, July.
    3. Haar, Nancy E. & Starr, Jennifer & MacMillan, Ian C., 1988. "Informal risk capital investors: Investment patterns on the East Coast of the U.S.A," Journal of Business Venturing, Elsevier, vol. 3(1), pages 11-29.
    4. Fama, Eugene F & Jensen, Michael C, 1983. "Separation of Ownership and Control," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 301-325, June.
    5. Aram, John D., 1989. "Attitudes and behaviors of informal investors toward early-stage investments, technology-based ventures, and coinvestors," Journal of Business Venturing, Elsevier, vol. 4(5), pages 333-347, September.
    6. Ross, Stephen A, 1978. "The Current Status of the Capital Asset Pricing Model (CAPM)," Journal of Finance, American Finance Association, vol. 33(3), pages 885-901, June.
    7. Freear, John & Wetzel, William Jr., 1990. "Who bankrolls high-tech entrepreneurs?," Journal of Business Venturing, Elsevier, vol. 5(2), pages 77-89, March.
    8. Hall, John & Hofer, Charles W., 1993. "Venture capitalists' decision criteria in new venture evaluation," Journal of Business Venturing, Elsevier, vol. 8(1), pages 25-42, January.
    9. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    10. Peter Kelly & Michael Hay, 1996. "Serial Investors and Early Stage Finance," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 5(2), pages 159-174, Summer.
    11. Landstrom, Hans, 1993. "Informal risk capital in Sweden and some international comparisons," Journal of Business Venturing, Elsevier, vol. 8(6), pages 525-540, November.
    12. Fiet, James O., 1995. "Reliance upon informants in the venture capital industry," Journal of Business Venturing, Elsevier, vol. 10(3), pages 195-223, May.
    13. Hart, Oliver, 1995. "Firms, Contracts, and Financial Structure," OUP Catalogue, Oxford University Press, number 9780198288817.
    14. Ehrlich, Sanford B. & De Noble, Alex F. & Moore, Tracy & Weaver, Richard R., 1994. "After the cash arrives: A comparative study of venture capital and private investor involvement in entrepreneurial firms," Journal of Business Venturing, Elsevier, vol. 9(1), pages 67-82, January.
    15. Freear, John & Sohl, Jeffrey E. & Wetzel, William Jr., 1994. "Angels and non-angels: Are there differences?," Journal of Business Venturing, Elsevier, vol. 9(2), pages 109-123, March.
    16. Wetzel, William Jr., 1987. "The informal venture capital market: Aspects of scale and market efficiency," Journal of Business Venturing, Elsevier, vol. 2(4), pages 299-313.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sergey Anokhin & Dietmar Grichnik & Robert D. Hisrich, 2008. "The Journey from Novice to Serial Entrepreneurship in China and Germany: Are the Drivers the Same?," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 6(2), pages 117-142.
    2. Tom Vanacker & Veroniek Collewaert & Ine Paeleman, 2013. "The Relationship between Slack Resources and the Performance of Entrepreneurial Firms: The Role of Venture Capital and Angel Investors," Journal of Management Studies, Wiley Blackwell, vol. 50(6), pages 1070-1096, September.
    3. Sali Li & William Schulze & Zhineng Li, 2009. "Plunging into the sea, again? A study of serial entrepreneurship in China," Asia Pacific Journal of Management, Springer, vol. 26(4), pages 667-680, December.
    4. V. Collewaert & S. Manigart & -, 2009. "First-Round Valuation Of Angel-Backed Companies: The Role Of Investor Human Capital," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 09/624, Ghent University, Faculty of Economics and Business Administration.
    5. Joël Ludvigsen, 2009. "Decision time in Belgium: an experiment as to how business angels evaluate investment opportunities," Working Papers CEB 09-037.RS, ULB -- Universite Libre de Bruxelles.
    6. Wu Zhenyu & Yuan Wenlong & Wei Xueqi, 2012. "The Effects of New Ventures' Resource Strategies on Angels' Investing Outcomes: Big Gains and Big Losses in Angel Investments," Entrepreneurship Research Journal, De Gruyter, vol. 2(3), pages 1-27, July.
    7. Melissa S. Cardon & Cheryl Mitteness & Richard Sudek, 2017. "Motivational Cues and Angel Investing: Interactions among Enthusiasm, Preparedness, and Commitment," Entrepreneurship Theory and Practice, , vol. 41(6), pages 1057-1085, November.
    8. Tiago Botelho & Richard Harrison & Colin Mason, 2021. "Business angel exits: a theory of planned behaviour perspective," Small Business Economics, Springer, vol. 57(1), pages 583-602, June.
    9. Dmitri Boreiko & Dimche Risteski, 2021. "Serial and large investors in initial coin offerings," Small Business Economics, Springer, vol. 57(2), pages 1053-1071, August.
    10. Edelman, Linda F. & Manolova, Tatiana S. & Brush, Candida G., 2017. "Angel Investing: A Literature Review," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 13(4-5), pages 265-439, September.
    11. Appah Ebimobowei & Okoli Margaret Nnenna, 2013. "Angel Investments: A Financing Option for Economic Transformation in Nigeria," International Journal of Management Sciences, Research Academy of Social Sciences, vol. 1(9), pages 341-348.
    12. Block, Jörn H. & Fisch, Christian O. & Obschonka, Martin & Sandner, Philipp G., 2019. "A personality perspective on business angel syndication✰," Journal of Banking & Finance, Elsevier, vol. 100(C), pages 306-327.
    13. Dawn Gregg & Madhavan Parthasarathy, 2017. "Factors affecting the long-term survival of eBay ventures: a longitudinal study," Small Business Economics, Springer, vol. 49(2), pages 405-419, August.
    14. Johannes Wallmeroth & Peter Wirtz & Alexander Peter Groh, 2017. "Institutional Seed Financing, Angel Financing, and Crowdfunding of Entrepreneurial Ventures: A Literature Review," Working Papers hal-01527999, HAL.
    15. Will Drover & Matthew S. Wood & Andrew Zacharakis, 2017. "Attributes of Angel and Crowdfunded Investments as Determinants of VC Screening Decisions," Entrepreneurship Theory and Practice, , vol. 41(3), pages 323-347, May.
    16. Veroniek Collewaert, 2012. "Angel Investors’ and Entrepreneurs’ Intentions to Exit Their Ventures: A Conflict Perspective," Entrepreneurship Theory and Practice, , vol. 36(4), pages 753-779, July.
    17. Lien, Wan-Chien & Chen, Jianhong & Sohl, Jeffrey, 2022. "Do I have a big ego? Angel investors' narcissism and investment behaviors," Journal of Business Venturing, Elsevier, vol. 37(5).
    18. Politis, Diamanto & Gabrielsson, Jonas, 2006. "Informal investors and value added: The contribution of investors’ experientially acquired resources in the entrepreneurial process," Papers in Innovation Studies 2006/12, Lund University, CIRCLE - Centre for Innovation Research.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Peter Kelly & Michael Hay, 1996. "Serial Investors and Early Stage Finance," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 5(2), pages 159-174, Summer.
    2. Mason, Colin M. & Harrison, Richard T., 2002. "Is it worth it? The rates of return from informal venture capital investments," Journal of Business Venturing, Elsevier, vol. 17(3), pages 211-236, May.
    3. Lu, Qing & Hwang, Peter & Wang, Clement K., 2006. "Agency risk control through reprisal," Journal of Business Venturing, Elsevier, vol. 21(3), pages 369-384, May.
    4. Joël Ludvigsen, 2009. "Decision time in Belgium: an experiment as to how business angels evaluate investment opportunities," Working Papers CEB 09-037.RS, ULB -- Universite Libre de Bruxelles.
    5. Fiet, James O. & Busenitz, Lowell W. & Moesel, Douglas D. & Barney, Jay B., 1997. "Complementary theoretical perspectives on the dismissal of new venture team members," Journal of Business Venturing, Elsevier, vol. 12(5), pages 347-366, September.
    6. John Freear & Jeffrey Sohl, 2001. "The Characteristics and Value-Added Contributions of Private Investors to Entrepreneurial Software Ventures," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 6(1), pages 84-103, Spring.
    7. Dutta, Supradeep & Folta, Timothy B., 2016. "A comparison of the effect of angels and venture capitalists on innovation and value creation," Journal of Business Venturing, Elsevier, vol. 31(1), pages 39-54.
    8. Lowell W. Busenitz & Douglas D. Moesel & James O. Fiet & Jay B. Barney, 1997. "The Framing of Perceptions of Fairness in the Relationship between Venture Capitalists and New Venture Teams," Entrepreneurship Theory and Practice, , vol. 21(3), pages 5-22, April.
    9. Rafał Morawczyński, 2020. "Venture Capitalists’ Investment Criteria in Poland: Entrepreneurial Opportunities, Entrepreneurs, and Founding Teams," Administrative Sciences, MDPI, vol. 10(4), pages 1-30, October.
    10. James O. Fiet, 1997. "Fragmentation in the Market for Venture Capital," Entrepreneurship Theory and Practice, , vol. 21(2), pages 5-20, January.
    11. Jeffrey E. Sohl, 2006. "Angel Investing: Changing Strategies During Volatile Times," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 11(2), pages 27-48, Summer.
    12. Tarek Roshdy Gebba & Mohamed Gamal Aboelmaged, 2016. "Corporate Governance of UAE Financial Institutions: A Comparative Study between Conventional and Islamic Banks," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 6(5), pages 1-7.
    13. Fiet, James O., 2001. "The theoretical side of teaching entrepreneurship," Journal of Business Venturing, Elsevier, vol. 16(1), pages 1-24, January.
    14. Scott Shane & Daniel Cable, 2002. "Network Ties, Reputation, and the Financing of New Ventures," Management Science, INFORMS, vol. 48(3), pages 364-381, March.
    15. Lohwasser, Todor S., 2020. "Meta-analyzing the relative performance of venture capital-backed firms," Discussion Papers of the Institute for Organisational Economics 4/2020, University of Münster, Institute for Organisational Economics.
    16. Daniel Appelhoff & René Mauer & Veroniek Collewaert & Malte Brettel, 2016. "The conflict potential of the entrepreneur’s decision-making style in the entrepreneur-investor relationship," International Entrepreneurship and Management Journal, Springer, vol. 12(2), pages 601-623, June.
    17. Wang, Sen & Bogle, Tim & van Kooten, G. Cornelis, 2012. "Forestry and the New Institutional Economics," Working Papers 130818, University of Victoria, Resource Economics and Policy.
    18. Johannes Wallmeroth & Peter Wirtz & Alexander Peter Groh, 2017. "Institutional Seed Financing, Angel Financing, and Crowdfunding of Entrepreneurial Ventures: A Literature Review," Working Papers hal-01527999, HAL.
    19. Heukamp, Franz & Liechtenstein, Heinrich & Wakeling, Nick, 2006. "Do business angels alter the risk-return equation in early stage investments? Business angels as seen by venture capitalists in the German speaking countries," IESE Research Papers D/655, IESE Business School.
    20. Richard T. Harrison & Colin M. Mason, 2007. "Does Gender Matter? Women Business Angels and the Supply of Entrepreneurial Finance," Entrepreneurship Theory and Practice, , vol. 31(3), pages 445-472, May.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:entthe:v:22:y:1998:i:4:p:23-42. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.