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Angels or Sharks? The Role of Personal Characteristics in Angel Investment Decisions

43 Pages Posted: 19 Dec 2016 Last revised: 15 Sep 2017

Thomas Jason Boulton

Miami University

Thomas Shohfi

Rensselaer Polytechnic Institute (RPI) - Department of Finance and Accounting

Pengcheng Zhu

University of Pittsburgh - Finance Group

Date Written: September 13, 2017

Abstract

We use actual negotiations between angel investors and entrepreneurs to study the impact of personal characteristics on investment outcomes. We construct a unique dataset with 707 investment requests led by 1,089 entrepreneurs and find that the personal characteristics of the entrepreneur, including gender, race, and age, are correlated with requested valuations, the likelihood that an offer is received, and the implied valuation when an angel investor extends an offer. Shared personal characteristics between entrepreneurs and investors also affect the likelihood that an investor makes an offer, the entrepreneur accepts an offer, and the implied valuation when an offer is extended.

Keywords: Angel Investors, Entrepreneurial Finance, Venture Capital

JEL Classification: G24, I25, J14, J15, J16, L26, M13

Suggested Citation

Boulton, Thomas Jason and Shohfi, Thomas and Zhu, Pengcheng, Angels or Sharks? The Role of Personal Characteristics in Angel Investment Decisions (September 13, 2017). 2017 Emerging Trends in Entrepreneurial Finance Conference. Available at SSRN: https://ssrn.com/abstract=2886855 or http://dx.doi.org/10.2139/ssrn.2886855

Thomas Boulton

Miami University ( email )

3028 Farmer School of Business
Oxford, OH 45056
United States
(513) 529-1563 (Phone)
(513) 529-8598 (Fax)

Thomas Shohfi (Contact Author)

Rensselaer Polytechnic Institute (RPI) - Department of Finance and Accounting ( email )

Pittsburgh Building
110 8th street
Troy, NY 12180
United States

HOME PAGE: http://shohfi.com/

Pengcheng Zhu

University of Pittsburgh - Finance Group ( email )

219 Mervis Hall
Pittsburgh, PA 15260
United States

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