Opening the black box: triggers for shifts in business angels' risk mitigation strategies within investments

摘要

We open up the black box of business angel risk mitigation within investments, exploring triggers that force angels to shift strategies to overcome performance and relationship risks. Primary data were collected from 32 interviews with four matched business angel-entrepreneur dyads. Extensive iterative theory and cross-case comparisons reveal that business angels often shift strategies over the course of an investment cycle due to internal or external context-specific triggers, rather than factors associated with a particular investor, entrepreneur, or investment-related characteristic. Moreover, entrepreneur responses significantly impact business angels'subsequent risk mitigation strategies. Two triggers emerging particularly strongly from the data were: (ⅰ) a shift in the angel's perception of the entrepreneur's ability and (ⅱ) the entrance of new investors. We theorize on these findings and derive four novel propositions.