This paper examines how angel investors' human capital affects the valuation of their portfolio companies, based on the pre-money valuation of 123 investment rounds in 58 Belgian companies. We argue that angel investors with higher levels of human capital will perceive a higher value-creating potential in entrepreneurial opportunities through their ability to see more value-creating options, a higher value-adding potential post-investment and an enhanced legitimacy provided to the venture. Economic theories suggest they appropriate these rents through lower valuations, while stewardship theory suggests they share value creation with entrepreneurs. Consistent with stewardship theory, we show angel investors negotiate higher valuations when they have higher levels of human capital, more specifically if they studied longer, have a business degree, more entrepreneurial experience or previous professional law experience. As such, our results contrast with the behaviour of venture capital investors who negotiate lower valuations when they have more experience.
This study examines how angel investor–entrepreneur task conflicts are related to portfolio company innovativeness and how this relationship is moderated by the level of agreement on priorities, diversity of entrepreneurial experience, and the level of communication. Using survey data gathered from 54 teams of angels and entrepreneurs in Belgium and the United States, we show that the negative relationship between task conflict and innovativeness is more severe when the teams have lower levels of agreement on priorities, when there is less diversity of experience in the team, and when the teams communicate more frequently.
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