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Angels or Sharks? The Role of Personal Characteristics in Angel Investment Decisions

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  • Thomas J. Boulton
  • Thomas D. Shohfi
  • Pengcheng Zhu

Abstract

We use actual negotiations between angel investors and entrepreneurs to study the impact of personal characteristics on investment outcomes. We construct a unique data set with 707 investment requests led by 1,089 entrepreneurs and find that the personal characteristics of the entrepreneur, including gender, race, and age, are correlated with requested valuations, the likelihood that an offer is received, and the implied valuation when an angel investor extends an offer. Shared personal characteristics between entrepreneurs and investors also affect the likelihood that an investor makes an offer, the entrepreneur accepts an offer, and the implied valuation when an offer is extended.

Suggested Citation

  • Thomas J. Boulton & Thomas D. Shohfi & Pengcheng Zhu, 2019. "Angels or Sharks? The Role of Personal Characteristics in Angel Investment Decisions," Journal of Small Business Management, Taylor & Francis Journals, vol. 57(4), pages 1280-1303, October.
    • Handle: RePEc:taf:ujbmxx:v:57:y:2019:i:4:p:1280-1303
    DOI: 10.1111/jsbm.12409
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    Cited by:

    1. Wesemann, Henrik & Antretter, Torben, 2023. "Why don’t you like me? Exploring the social venture funding gap in angel investing," Journal of Business Venturing Insights, Elsevier, vol. 20(C).
    2. Michael Jetter & Kieran Stockley, 2023. "Gender match and negotiation: evidence from angel investment on Shark Tank," Empirical Economics, Springer, vol. 64(4), pages 1947-1977, April.
    3. Huang, Xing & Ivković, Zoran & Jiang, John Xuefeng & Wang, Isabel Yanyan, 2023. "Angel investment and first impressions," Journal of Financial Economics, Elsevier, vol. 149(2), pages 161-178.

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