When emotions tell the story: Beyond Business Angels' Experience

Topic This study examines business angel groups - BAGs (Bonnet et al., 2021) by analyzing the determinants of members' involvement in various investment-related activities, given that such involvement constitutes a key driver of BAG's performance (Antretter et al., 2020). It builds on the premise that BAs develop their trajectories within these collectives over time, as a function of their tenure and accumulated participation within the group. In line with Demauras, (2023), becoming a BA can be conceptualized as a gradual learning process rooted in experiential accumulation, which represents a core rationale for the existence of BAG. The investment levels and the magnitude of capital committed during years contribute to shaping individual experience, which, in turn, influences subsequent investment behaviors. However, the construction of such experience cannot be understood independently from the emotional dimensions associated with investment activities. Emotions are experienced individually, shared collectively within the group, and actively regulated by investors. Both successful and unsuccessful investment outcomes generate emotional responses that are intrinsically linked to investors' individual dispositions. As highlighted by Kaiser and Kuckertz (2024), more experienced investors tend to frame and interpret their activities increasingly through an emotional lens. Building on this emerging literature at the intersection of experience and emotion, this study seeks to investigate how these two dimensions jointly contribute to explaining BAs' level of involvement within their group. Understanding how individual members engage within their respective groups (across activities such as screening, selection, investment, and post-investment monitoring) thus represents a key research concern. Rather than assuming that the intrinsic quality of a business opportunity is a sufficient signal of investor attractiveness, it is important to acknowledge that investors' emotional reactions may constitute critical parameters shaping their propensity to engage with different projects. Such an approach contributes to a more nuanced understanding of investment dynamics within BAGs, especially in the context of ventures addressing societal and environmental challenges Aim In the early-stage investment literature, prior investment experience has been widely investigated, yet empirical findings remain inconclusive, with studies reporting mixed and sometimes contradictory relationships with investment behavior. On one hand, more experienced investors with larger portfolios tend to benefit from improved deal flow, conduct assessments with fewer cognitive biases, and engage more effectively in post-investment activities (Blohm et al., 2022; Croce et al., 2023; Wesemann and Antretter, 2023). Similarly, the amount invested has been shown to positively influence both the level of involvement and the likelihood of investing, reflecting stronger commitment to the investment process (Cohen et al., 2025; Maus et al., 2024). On the other hand, some studies highlight a negative relationship between experience and investment outcomes. In particular, greater experience, proxied by amount invested, may lead to lower investment performance (Antretter et al., 2020; Wesemann and Antretter, 2023), as well as more conservative behaviors, such as investing less frequently and committing smaller amounts over time (Blaseg and Hornuf, 2024). A similar ambivalence is observed with respect to seniority: while the number of years in the activity is associated with higher involvement (Botelho et al., 2023), they also correlate with a tendency to reduce both investment frequency and amount pledged in the future (Wiltbank et al., 2009). We suggest that these contradictory findings about the relationship between experience and investment behavior, can be explained by taking into account cognitive and emotional mechanisms. Emotions emerge from individuals' subjective interpretations of the meaning of events or stimuli for themselves (Zhu et al., 2024). Early studies acknowledging the role of emotion in investment decision-making primarily emphasized trust, perceived passion and perceived narcissism or humility(Maxwell and Lévesque, 2014; Mitteness et al., 2012; Vilanova and Vitanova, 2026) (Maxwell and Lévesque, 2014). From a cognitive standpoint, affective reactions can be understood as heuristics that enable investors to make rapid and efficient decisions under conditions of uncertainty (Goglin and Desbrières, 2020). The affect heuristic thus operates as a fast, largely intuitive and often unconscious mental shortcut, enabling individuals to form judgments independently of extensive cognitive deliberation. Studies by Demauras (2023) and Fili (2014) also emphasize that post-investment interactions are replete with events that trigger emotional responses requiring ongoing regulation. In this context, Harrison et al. (2015) demonstrate that behaviors occurring after investment can undermine or damage trust between business angels and entrepreneurs, thereby underscoring the importance of emotional management throughout the investment lifecycle.