Becker Meets Sharks: Angel Financing and Venture Performance

Zhihong Shi (), Elena Smirnova (), Shalei Simms () and Christopher Castro-Andrade ()
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Zhihong Shi: State University of New York at Old Westbury
Elena Smirnova: State University of New York at Old Westbury
Shalei Simms: State University of New York at Old Westbury
Christopher Castro-Andrade: The City University of New York

Eastern Economic Journal, 2025, vol. 51, issue 3, No 2, 340-372

Abstract: Abstract We study small-scale venture capital investment, or angel investment, through the popular reality show Shark Tank with the goal of ascertaining the financial impact of angel investors’ fame on venture capital allocation. We use a hand-collected dataset, applying Becker’s theory of discrimination to the Shark Tank simulation of the angel investment market. We use Google Trends data on angel investors as a measure of investors’ fame to test its influence on angel financing. We find that, in the context of angel capital, entrepreneurs are not inclined to pay a “celebrity premium” for more renowned backers. However, the fame of angel investors is positively associated with higher project survival rates. Additionally, excessive equity relinquishment by founding entrepreneurs is linked to lower project survival rates, highlighting the balance between funding negotiations and long-term entrepreneurial success.

Keywords: Venture capital; Angel investment; Shark Tank; Entrepreneurial finance (search for similar items in EconPapers)
JEL-codes: G24 L26 M13 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1057/s41302-025-00299-4

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