Trustworthiness: A Critical Ingredient for Entrepreneurs Seeking Investors

Andrew L. Maxwell and Moren Lévesque

Entrepreneurship Theory and Practice, 2014, vol. 38, issue 5, 1057-1080

Abstract: We investigate how an entrepreneur's behaviors during an initial interaction with a business angel can build, damage, or violate trust, and how the investor's level of trust (prompted by the entrepreneur's behavior) can affect his/her decision to make an investment offer. Our empirical analysis shows that entrepreneurs who receive offers from business angels exhibit a larger number of trust–building behaviors during the initial interaction and a smaller number of unintentional trust–damaging behaviors than those who do not receive an offer, and display few deliberate trust–violating behaviors. We further observe that the investor's deployment of a control mechanism is a prerequisite for receiving an investment offer for all entrepreneurs who damage or violate trust.

Date: 2014
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Citations: View citations in EconPapers (32)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:entthe:v:38:y:2014:i:5:p:1057-1080

DOI: 10.1111/j.1540-6520.2011.00475.x

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