IDEAS home Printed from https://ideas.repec.org/p/hal/journl/halshs-02374570.html
   My bibliography  Save this paper

Investing Human Capital: Angel Cognition and Active Involvement in Business Angel Groups

Author

Listed:
  • Peter Wirtz

    (Laboratoire de Recherche Magellan - UJML - Université Jean Moulin - Lyon 3 - Université de Lyon - Institut d'Administration des Entreprises (IAE) - Lyon)

  • Christophe Bonnet

    (GDF - Gestion, Droit et Finance - EESC-GEM Grenoble Ecole de Management)

  • Laurence Cohen
  • Christophe Haon

    (MKT - Marketing - EESC-GEM Grenoble Ecole de Management)

Abstract

The present research sets out to reach a better understanding of the determinants of business angels' active involvement in making business angel groups accomplish diverse functions and building cognitive resources and shared competencies. We develop a framework where angels' decision making style and professional experience are key in explaining their degree and type of involvement with diverse business angel group activities. To test the related propositions, we conduct a questionnaire survey with the members of one of the largest French business angel groups. Our results show that business angels with a control-oriented decision-making style, as well as angels with previous professional experiences as a CEO and in marketing and sales, tend to be more actively involved in key angel group activities, both with regard to investment related activities and angel group management activities. While discussing the results, we propose a tentative model of angel group cognition and outcomes for future extensions of the present research.

Suggested Citation

  • Peter Wirtz & Christophe Bonnet & Laurence Cohen & Christophe Haon, 2020. "Investing Human Capital: Angel Cognition and Active Involvement in Business Angel Groups," Post-Print halshs-02374570, HAL.
    • Handle: RePEc:hal:journl:halshs-02374570
    DOI: 10.3917/entre1.191.0043
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-02374570
    as

    Download full text from publisher

    File URL: https://shs.hal.science/halshs-02374570/document
    Download Restriction: no
    File URL: https://libkey.io/10.3917/entre1.191.0043?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
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Christophe Bonnet & Peter Wirtz & Christophe Haon, 2013. "Liftoff: when strong growth is predicted by angels and fuelled by professional venture funds," Revue de l'Entrepreneuriat, De Boeck Université, vol. 12(4), pages 59-78.
    2. Johannes Wallmeroth & Alexander Groh & Peter Wirtz, 2018. "Venture Capital, Angel Financing, and Crowdfunding of Entrepreneurial Ventures : A Literature Review," Post-Print hal-02312128, HAL.
    3. Bonini, Stefano & Capizzi, Vincenzo & Valletta, Mario & Zocchi, Paola, 2018. "Angel network affiliation and business angels' investment practices," Journal of Corporate Finance, Elsevier, vol. 50(C), pages 592-608.
    4. repec:taf:veecee:v:14:y:2012:i:2-3:p:91-110 is not listed on IDEAS
    5. Robert Wiltbank, 2005. "Investment practices and outcomesof informal venture investors," Venture Capital, Taylor & Francis Journals, vol. 7(4), pages 343-357, August.
    6. Carpentier, Cécile & Suret, Jean-Marc, 2015. "Angel group members' decision process and rejection criteria: A longitudinal analysis," Journal of Business Venturing, Elsevier, vol. 30(6), pages 808-821.
    7. Chandler, Gaylen N. & DeTienne, Dawn R. & McKelvie, Alexander & Mumford, Troy V., 2011. "Causation and effectuation processes: A validation study," Journal of Business Venturing, Elsevier, vol. 26(3), pages 375-390, May.
    8. Christophe Bonnet & Peter Wirtz, 2011. "Raising capital for rapid growth in young technology ventures: when business angels and venture capitalists coinvest," Venture Capital, Taylor & Francis Journals, vol. 14(2-3), pages 91-110, December.
    9. Rudy Aernoudt, 2005. "Executive forum: Seven ways to stimulate business angels' investments," Venture Capital, Taylor & Francis Journals, vol. 7(4), pages 359-371, March.
    10. William R. Kerr & Josh Lerner & Antoinette Schoar, 2014. "The Consequences of Entrepreneurial Finance: Evidence from Angel Financings," The Review of Financial Studies, Society for Financial Studies, vol. 27(1), pages 20-55, January.
    11. Wallmeroth, Johannes & Wirtz, Peter & Groh, Alexander Peter, 2018. "Venture Capital, Angel Financing, and Crowdfunding of Entrepreneurial Ventures: A Literature Review," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 14(1), pages 1-129, February.
    12. Allan L. Riding, 2008. "Business angels and love money investors: segments of the informal market for risk capital," Venture Capital, Taylor & Francis Journals, vol. 10(4), pages 355-369, June.
    13. Martine Séville & Christophe Bonnet & Peter Wirtz, 2017. "Genesis and functioning of the board of directors of an entrepreneurial firm: the role of the directors’ social identification
      [Genèse et fonctionnement du conseil d’administration d’une firme entr      ," Post-Print hal-02127773, HAL.
    14. Vincenzo Capizzi, 2015. "The returns of business angel investments and their major determinants," Venture Capital, Taylor & Francis Journals, vol. 17(4), pages 271-298, October.
    15. Colin Mason & Tiago Botelho & Richard Harrison, 2016. "The transformation of the business angel market: empirical evidence and research implications," Venture Capital, Taylor & Francis Journals, vol. 18(4), pages 321-344, October.
    16. Wiltbank, Robert & Read, Stuart & Dew, Nicholas & Sarasvathy, Saras D., 2009. "Prediction and control under uncertainty: Outcomes in angel investing," Journal of Business Venturing, Elsevier, vol. 24(2), pages 116-133, March.
    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. Laurence Cohen & Peter Wirtz, 2022. "Decision-making style in entrepreneurial finance and growth," Small Business Economics, Springer, vol. 59(1), pages 183-210, June.
    2. Bonnet, Christophe & Capizzi, Vincenzo & Cohen, Laurence & Petit, Aurelien & Wirtz, Peter, 2022. "What drives the active involvement in business angel groups? The role of angels' decision-making style, investment-specific human capital and motivations," Journal of Corporate Finance, Elsevier, vol. 77(C).

    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. Bonnet, Christophe & Capizzi, Vincenzo & Cohen, Laurence & Petit, Aurelien & Wirtz, Peter, 2022. "What drives the active involvement in business angel groups? The role of angels' decision-making style, investment-specific human capital and motivations," Journal of Corporate Finance, Elsevier, vol. 77(C).
    2. Bonini, Stefano & Capizzi, Vincenzo & Zocchi, Paola, 2019. "The performance of angel-backed companies," Journal of Banking & Finance, Elsevier, vol. 100(C), pages 328-345.
    3. Laurence Cohen & Peter Wirtz, 2018. "Caractéristiques des entrepreneurs, finance entrepreneuriale et trajectoires de croissance," Working Papers hal-01723858, HAL.
    4. 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.
    5. Cumming, Douglas & Groh, Alexander Peter, 2018. "Entrepreneurial finance: Unifying themes and future directions," Journal of Corporate Finance, Elsevier, vol. 50(C), pages 538-555.
    6. Laurence Cohen & Peter Wirtz, 2022. "Decision-making style in entrepreneurial finance and growth," Small Business Economics, Springer, vol. 59(1), pages 183-210, June.
    7. Antretter, Torben & Sirén, Charlotta & Grichnik, Dietmar & Wincent, Joakim, 2020. "Should business angels diversify their investment portfolios to achieve higher performance? The role of knowledge access through co-investment networks," Journal of Business Venturing, Elsevier, vol. 35(5).
    8. Christophe Bonnet & Laurence Cohen & Peter Wirtz, 2015. "Angel Cognition and Active Involvement in BAN Governance and Management," Working paper serie RMT - Grenoble Ecole de Management hal-01182804, HAL.
    9. Laurence Cohen & Kirsten Burkhardt, 2019. "Entrepreneurs (novices vs. experts) and investors: Interaction and rationality dynamics (effectual vs. causal) [Entrepreneurs (novice vs. expert) et investisseurs : interactions et dynamique des ra," Post-Print hal-02177388, HAL.
    10. Butticè, Vincenzo & Croce, Annalisa & Ughetto, Elisa, 2021. "Network dynamics in business angel group investment decisions," Journal of Corporate Finance, Elsevier, vol. 66(C).
    11. 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.
    12. Harrison, Richard T. & Bock, Adam J. & Gregson, Geoff, 2020. "Stairway to heaven? rethinking angel investment policy and practice," Journal of Business Venturing Insights, Elsevier, vol. 14(C).
    13. Cipollone, Angela & Giordani, Paolo E., 2019. "Entrepreneurs meet financiers: Evidence from the business angel market," Journal of Business Venturing, Elsevier, vol. 34(5), pages 1-1.
    14. Marc Cowling & Ross Brown & Neil Lee, 2021. "The geography of business angel investments in the UK: Does local bias (still) matter?," Environment and Planning A, , vol. 53(5), pages 1180-1200, August.
    15. Julien Salin & Nadine Levratto, 2020. "Are business angel-backed companies truly different? a comparative analysis of the financial structure," EconomiX Working Papers 2020-5, University of Paris Nanterre, EconomiX.
    16. Lefebvre, Vincent & Certhoux, Gilles & Radu-Lefebvre, Miruna, 2022. "Sustaining trust to cross the Valley of Death: A retrospective study of business angels’ investment and reinvestment decisions," Technovation, Elsevier, vol. 109(C).
    17. Solodoha, Eliran & Rosenzweig, Stav & Harel, Shai, 2023. "Incentivizing angels to invest in start-ups: Evidence from a natural experiment," Research Policy, Elsevier, vol. 52(1).
    18. Ikenna Uzuegbunam & Brandon Ofem & Joe Fox & Satish Nambisan, 2023. "The angels’ share hypothesis in new firms," Small Business Economics, Springer, vol. 61(2), pages 843-865, August.
    19. Andrea Bellucci & Gianluca Gucciardi & Rossella Locatelli & Cristiana Schena, 2022. "Gender Gap in Business Angel financing," Mo.Fi.R. Working Papers 175, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    20. Cox, Kevin C. & Lortie, Jason & Stewart, Steven A., 2017. "When to pray to the angels for funding: The seasonality of angel investing in new ventures," Journal of Business Venturing Insights, Elsevier, vol. 7(C), pages 68-76.

    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:hal:journl:halshs-02374570. 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: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    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.