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Angel investors’ selection criteria: A comparative institutional perspective

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  • Zhujun Ding

    ()

  • Sunny Sun

    ()

  • Kevin Au

    ()

Abstract

Despite the important role of angel investors as critical financial providers for new ventures, little is known regarding how the institutions present in very different institutional environments impact their investment decisions. While angel investors might be expected to make decisions based on similar selection criteria, they are also embedded within and affected by different institutional settings in which they invest, and as a result they give these criteria weight that are different from those of other investors. We compare angel investors’ selection criteria in China and Denmark utilizing a comparative institutional perspective. Utilizing a policy-capturing approach to understanding their decision criteria, we find that angel investors in China, embedded within relationship-based institutions, tend to rely more on strong ties such as family and friends in the management team. They also give risks less weight as compared with angel investors in Denmark, which operate within more rule-based institutional contexts. As with venture capitalists, angel investors modify their decision criteria to fit the local institutional conditions. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Zhujun Ding & Sunny Sun & Kevin Au, 2014. "Angel investors’ selection criteria: A comparative institutional perspective," Asia Pacific Journal of Management, Springer, vol. 31(3), pages 705-731, September.
  • Handle: RePEc:kap:asiapa:v:31:y:2014:i:3:p:705-731
    DOI: 10.1007/s10490-014-9374-z
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    References listed on IDEAS

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    Cited by:

    1. Junyon Im & Sunny Sun, 2015. "Profits and outreach to the poor: The institutional logics of microfinance institutions," Asia Pacific Journal of Management, Springer, vol. 32(1), pages 95-117, March.
    2. Michael Carney, 2015. "Capacity building at the Asia Pacific Journal of Management," Asia Pacific Journal of Management, Springer, vol. 32(4), pages 827-833, December.
    3. William Scheela & Edmundo Isidro & Thawatchai Jittrapanun & Nguyen Trang, 2015. "Formal and informal venture capital investing in emerging economies in Southeast Asia," Asia Pacific Journal of Management, Springer, vol. 32(3), pages 597-617, September.
    4. Sunny Sun & Xiaoming Yang & Weiwen Li, 2014. "Variance-enhancing corporate entrepreneurship under deregulation: An option portfolio approach," Asia Pacific Journal of Management, Springer, vol. 31(3), pages 733-761, September.
    5. Contreras-Pacheco, Orlando E. & Barbosa, Alejandra E., 2016. "Financiación al Desarrollo Sostenible a través de Inversiones de Impacto - Hacia la Construcción de un Framework Teórico
      [Financing Sustainable Development through Impact Investments - Towards a Th
      ," MPRA Paper 88139, University Library of Munich, Germany.
    6. Steven Si & Xuebao Yu & Aiqi Wu & Shouming Chen & Song Chen & Yiyi Su, 2015. "Entrepreneurship and poverty reduction: A case study of Yiwu, China," Asia Pacific Journal of Management, Springer, vol. 32(1), pages 119-143, March.
    7. repec:kap:asiapa:v:35:y:2018:i:2:d:10.1007_s10490-017-9560-x is not listed on IDEAS
    8. Cumming, Douglas & Zhang, Yelin, 2016. "Alternative investments in emerging markets: A review and new trends," Emerging Markets Review, Elsevier, vol. 29(C), pages 1-23.
    9. Ding, Zhujun & Au, Kevin & Chiang, Flora, 2015. "Social trust and angel investors' decisions: A multilevel analysis across nations," Journal of Business Venturing, Elsevier, vol. 30(2), pages 307-321.

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