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Social contagions and interactions: how angel group members reach final individual-level decisions during investment process

Research output: Contribution to conference - Without ISBN/ISSN Conference paperpeer-review

Published
Publication date21/06/2018
<mark>Original language</mark>English
EventThe European Academy of Management 2018 - Iceland, Reykjavik, Iceland
Duration: 19/06/201823/06/2018

Conference

ConferenceThe European Academy of Management 2018
Country/TerritoryIceland
CityReykjavik
Period19/06/1823/06/18

Abstract

This study focuses on the interactions amongst angel group members to explore the role of discussions between members about the categories associated with the quality of venture and the funding potential in reaching final individual-level decisions during the investment process. Data were obtained from case archival material as in-depth interviews with group investors who made an offer, prospective investors who rejected the opportunity, as well as entrepreneurs who were funded. Results provide insights into the interactions and discussions about the venture quality against the categories amongst group members, playing a quality certification role in due diligence. Such discussions are concentrated on some categories that members have concerns with, lead to thorough evaluation results. We also show that the criteria used vary depending on each member, which are associated with the background and the level of engagement with due diligence. Social contagion actually plays an essential role in making the investment decisions for inexperienced, first-time investors or those with a difficulty in coming up with conclusive evaluation against some categories.