Business angels ties with entrepreneurs

An informal investor finances a new business being started by an entrepreneur. The investor may fund someone they are strongly tied to, notably family and relatives, or perhaps a stranger pitching a good idea. Something influences the investor to select one tie rather than others for funding. We argue that selection is embedded in culture, specifically the dimension of traditional versus secular-rational or modern culture. The research question is, how is traditionality versus modernity affecting the ties that investors select for funding? A globally representative sample of 133,553 investors in 115 economies has been surveyed by the Global Entrepreneurship Monitor. The individual-level data is combined with national-level measures of culture from the World Values Survey. Hierarchical linear modeling is used for testing hypotheses. Traditional culture is found to encourage investors to fund new businesses by family and relatives. Secular-rational or modern culture influences investors to finance businesses started by strangers pitching a good business idea. The findings contribute to understanding embeddedness of financing in culture.