Horse vs. Jockey? How stage of funding process and industry experience affect the evaluations of angel investors

Angel investors make evaluations at different stages of the funding process; so we explore how the importance angels place on different investment criteria varies and how industry experience impacts their evaluations. Data were collected at the screening stage as angel investors evaluated the strength of the entrepreneur and the opportunity, and made decisions regarding whether the deal should proceed to due diligence, as well as their personal interest in making an investment. Additional data were collected regarding whether these angels made an investment at the funding stage. We tested our hypotheses using a multilevel approach to account for the nested nature of the data -- multiple evaluations nested within each angel, nested within each screening presentation. Our results show that the entrepreneur matters most when angels are deciding whether a deal should proceed to due diligence; opportunity strength represents a more important investment criterion when angels switch to determining whether a deal matches their own investment goals as the deal progresses through the funding process. Additionally, we find that three types of industry experience differ in their impact on the evaluation process. The findings offer new insights and underscore the importance of considering how individual characteristics impact evaluations of funding potential.