Prediction and Control Under Uncertainty: Outcomes in Angel Investing

Posted: 13 Aug 2009

See all articles by Robert Wiltbank

Robert Wiltbank

Willamette University - Atkinson Graduate School of Management

Stephen J. Read

University of Southern California - Department of Psychology

Nicholas Dew

University of Virginia - Darden School of Business

Saras D. Sarasvathy

University of Virginia - Darden School of Business

Abstract

Venture investing plays an important role in entrepreneurship not only because financial resources are important to new ventures, but also because early investors help shape the ventures' managerial and strategic destiny. In this study of 121 angel investors who had made 1038 new venture investments, we empirically investigate angel investors' differential use of predictive versus non-predictive control strategies. We show how the use of these strategies affects the outcomes of angel investors. Results show that angels who emphasize prediction make significantly larger venture investments, while those who emphasize non-predictive control experience a reduction in investment failures without a reduction in their number of successes.

Suggested Citation

Wiltbank, Robert and Read, Stephen J. and Dew, Nicholas and Sarasvathy, Saras D., Prediction and Control Under Uncertainty: Outcomes in Angel Investing. Batten Institute Research Paper Series No. 2009 W 1, Journal of Business Venturing, Vol. 24, No. 2, 2009, Available at SSRN: https://ssrn.com/abstract=1434927

Robert Wiltbank (Contact Author)

Willamette University - Atkinson Graduate School of Management ( email )

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Stephen J. Read

University of Southern California - Department of Psychology ( email )

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Los Angeles, CA 90089-1061
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Nicholas Dew

University of Virginia - Darden School of Business

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

Saras D. Sarasvathy

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

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