Normally entrepreneur would raise fund from angel investors during the initial round. If the venture program was by then successful, the entrepreneur would then continue the fund-raising process from venture capitalist. By adopting the convertible preferred stock, we managed to construct the two-stage angel investment decision process. This research reveals the following (1) The probability of the first stage’s success has negative relationships with levels of priority dividend in both first and second stages, as well as with the venture capitalist’s proportion of shares. (2) The probability of the second stage’s success has negative relationships with the venture capitalist’s proportion of shares and the dividend level of both first and second stage funding. (3) There has been a threshold of dividend distribution, which belongs to angel investor. While the level of angel investor’s shares is higher than the threshold, AN would decide to join the second phase of the program; otherwise, AN would exit the project at the end of the first stage.
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