Prediction and Control: The Specific Role of Business Angels in the Investment Process

Kirsten Burkhardt-Bourgeois () and Laurence Cohen
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Kirsten Burkhardt-Bourgeois: CREGO - Centre de Recherche en Gestion des Organisations - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UB - Université de Bourgogne - UBFC - Université Bourgogne Franche-Comté [COMUE] - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE]
Laurence Cohen: MAGELLAN - Laboratoire de Recherche Magellan - UJML - Université Jean Moulin - Lyon 3 - Université de Lyon - Institut d'Administration des Entreprises (IAE) - Lyon

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Abstract: Entrepreneurs and related investors (business angels and venture capitalists) rely on different types of rationalities. Extant research suggests that conflicts resulting from misunderstanding can emerge between entrepreneurs and investors when they adopt different rationalities but must switch those rationalities because of the maturity of their ventures and the degree of uncertainty they face. Relying on three in-depth case studies, this research contributes to both entrepreneurship and effectuation literature by emphasizing the specific role of business angels in helping entrepreneurs switch rationalities when necessary to attract funding resources from venture capitalists. The research contributes to literature on entrepreneurial finance by analyzing the dynamics between entrepreneurs and different types of investors. It also identifies the role of business angels in helping entrepreneurs switch rationalities to avoid misunderstandings with venture capitalists as an important determinant of co-investment and contributes to literature on entrepreneurship by applying effectuation theory to a new empirical ground.

Keywords: Control-oriented/predictive; Causation/effectuation; Business angels; Venture capital; Decision-making style; Rationalities; Prédictif/orienté contrôle; Causal/effectual; Capital-risqueurs; Style de prise de décision; Rationalités (search for similar items in EconPapers)
Date: 2022-03-21
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Published in Revue de l'Entrepreneuriat, 2022, Vol. 21 (1), pp.93-126. ⟨10.3917/entre1.pr.0034⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03640588

DOI: 10.3917/entre1.pr.0034

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