Trust between entrepreneurs and angel investors: exploring positive and negative implications for venture performance assessments
Publication type
Vlerick strategic journal articlePublication Year
2014Journal
Journal of ManagementPublication Volume
40Publication Issue
7Publication Begin page
1980Publication End page
2008
Metadata
Show full item recordAbstract
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.Knowledge Domain/Industry
Entrepreneurshipae974a485f413a2113503eed53cd6c53
10.1177/0149206312463937