Trust between entrepreneurs and angel investors: exploring positive and negative implications for venture performance assessments
Bammens, Yannick Collewaert, Veroniek
Bammens, Yannick
Collewaert, Veroniek
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Publication Type
Journal article with impact factor
Editor
Supervisor
Publication Year
2014
Journal
Journal of Management
Book
Publication Volume
40
Publication Issue
7
Publication Begin page
1980
Publication End page
2008
Publication NUmber of pages
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Abstract
The study of trust-related outcomes has had a long tradition in the organizational literature. However, few have considered potential darker sides of trust or have explored its effects in the setting of entrepreneurial ventures. This study does so by examining how perceptions of entrepreneurs and angel investors concerning the degree of trust in their relationship impact the latter’s assessments of venture performance. Hypotheses are tested using survey data from the lead entrepreneur and angel investor of 54 ventures. Results indicate that angel investors evaluate portfolio company performance more positively when they perceive high trust, whereas entrepreneurs’ trust perceptions are negatively associated with angel investors’ assessments of venture performance. Further, these effects are partially mediated by the quality of information exchanges between both parties. Together, these findings point to the benefits as well as threats that come with the presence of strong trust in entrepreneur–angel investor relationships.
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Keywords
Trust, Angel Financing, Entrepreneurship, Communication, Venture Performance Assessments