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Exploring investor readiness: Assessments by entrepreneurs and investors in Australia

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  • Evan J. Douglas
  • Dean Shepherd

Abstract

Entrepreneurs often submit crude business plans to potential investors and are frequently disappointed when the investor decides that the new venture is not yet 'investment ready'. This paper examines the nature of investor readiness and the differing perceptions of investor readiness by entrepreneurs relative to venture capitalists in Australia. It is found that when the assessments of each investor readiness dimension are combined they are related to the venture capitalists' intuitive (gut) assessments; that new ventures are perceived to be more marketing and management ready than technology ready; and investors and entrepreneurs differ in their perception of readiness (technology, market, management and overall).

Suggested Citation

  • Evan J. Douglas & Dean Shepherd, 2002. "Exploring investor readiness: Assessments by entrepreneurs and investors in Australia," Venture Capital, Taylor & Francis Journals, vol. 4(3), pages 219-236, July.
    • Handle: RePEc:taf:veecee:v:4:y:2002:i:3:p:219-236
    DOI: 10.1080/13691060213713
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    References listed on IDEAS

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    3. Gnych, Sophia & Lawry, Steven & McLain, Rebecca & Monterroso, Iliana & Adhikary, Anukram, 2020. "Is community tenure facilitating investment in the commons for inclusive and sustainable development?," Forest Policy and Economics, Elsevier, vol. 111(C).
    4. Hor, Shoon Chan (Timothy) & Chang, Artemis & Torres de Oliveira, Rui & Davidsson, Per, 2021. "From the theories of financial resource acquisition to a theory for acquiring financial resources - how should digital ventures raise equity capital beyond seed funding," Journal of Business Venturing Insights, Elsevier, vol. 16(C).
    5. Melissa S. Cardon & Cheryl Mitteness & Richard Sudek, 2017. "Motivational Cues and Angel Investing: Interactions among Enthusiasm, Preparedness, and Commitment," Entrepreneurship Theory and Practice, , vol. 41(6), pages 1057-1085, November.
    6. Brett Anthony White & John Dumay, 2020. "The angel investment decision: insights from Australian business angels," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(3), pages 3133-3162, September.
    7. Block, Joern H. & De Vries, Geertjan & Schumann, Jan H. & Sandner, Philipp, 2014. "Trademarks and venture capital valuation," Journal of Business Venturing, Elsevier, vol. 29(4), pages 525-542.
    8. Jenny Buchan & Lorelle Frazer & Scott Weaven & Binh Tran†Nam & Anthony Grace, 2018. "The Adequacy of Pre†purchase Due Diligence in Independent Small Business and Franchising," Australian Accounting Review, CPA Australia, vol. 28(1), pages 127-139, March.
    9. Colin Mason & Richard Harrison, 2003. "Closing the Regional Equity Gap? A Critique of the Department of Trade and Industry's Regional Venture Capital Funds Initiative," Regional Studies, Taylor & Francis Journals, vol. 37(8), pages 855-868.
    10. Jeffrey E. Sohl, 2006. "Angel Investing: Changing Strategies During Volatile Times," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 11(2), pages 27-48, Summer.
    11. Colin Mason & Jennifer Kwok, 2010. "Investment Readiness Programmes and Access to Finance: A Critical Review of Design Issues," Local Economy, London South Bank University, vol. 25(4), pages 269-292, June.
    12. Smith, Brett R. & Bergman, Brian J., 2020. "The other side of the coin: Investor identity and its role in resource provision," Journal of Business Venturing Insights, Elsevier, vol. 14(C).
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    14. Gilles Certhoux & Alexandre Perrin, 2013. "Business Angels' practices in the screening stage: A study of knowledge transfer to the entrepreneur," Post-Print hal-00853184, HAL.
    15. Katalin Takacs Haynes & Michael A. Hitt & Joanna Tochman Campbell, 2015. "The Dark Side of Leadership: Towards a Mid-Range Theory of Hubris and Greed in Entrepreneurial Contexts," Journal of Management Studies, Wiley Blackwell, vol. 52(4), pages 479-505, June.

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