Zoomvesting: angel investors' perception of subjective cues in online pitching

Purpose The COVID-19 pandemic transformed angel investment meetings from in-person to online. The purpose of this paper is to explore whether this move affected angel investors' perception of subjective behavioral cues in pitch sessions within a large Brazilian angel group. Design/methodology/approach This study followed an exploratory approach using a triangulation process that combined observation, documents and interviews. Data collected by observation, document studies, and interviews were themed, coded, and organized during the research. Findings The move from in-person to online pitches did not seem to affect levels of trustworthiness or arrogance as angels assessed more message content during Q&A sessions. Body movement, gestures and “eye gaze” (i.e. the look on a presenter’s face) played a central role in passion assessment during in-person meetings. Body language was highly limited during online sessions and tone of voice became the main source of passion assessment. Research limitations/implications The findings of this study suggest that pitches at online meetings affect angel investors' perception of founders' subjective cues, particularly cues pertaining to passion. Entrepreneurs should be trained to convey passion with tone of voice and to improve their body language in the context of webcam use. The interviews with volunteer sampling were subject to volunteer bias. Additionally, the findings may be affected by cultural context. Practical implications A practical contribution of this study is to highlight the need for entrepreneurs to be trained for online pitches. In an online setting, body language is limited, but it is still possible to use one’s hands and tone of voice to connect better to investors. Originality/value This study is unique because it captures the transition of angel investment meetings from in-person affairs before the pandemic to online meetings during the pandemic crisis. These unique circumstances provided a real-world laboratory to observe founders' subjective cue effects on angel investment decision-making.

A High Tech Start-up’s Journey Towards Funding

<p>1.1 Masters background As part of the “Masters in Advanced Technology Programme” each student had to select a high-tech start-up that they wanted to be involved in throughout the year. Each individual would bring value to the start up through their background and experience. The start-up I selected was an interactive robotic toy called “Auti”. Project champion, Helen’s envisioned goal was for the toy to help children with autism learn positive behaviours. Our team consisted of two main individuals not including the product champion (Please refer to Appendix A to learn more about the team, team dynamics etc.). My individual responsibility in terms of contribution to the team was to establish a strategic business plan, including a growth strategy for the project. Gaining funding is a critical part of any start-up’s growth (Ministry of Economic Development, 2007). Financial planning forces companies to think about their goals. A common goal most companies have is the goal to grow (Ross et al., 2002). 1.2 Objectives The objective of this study was to identify the best suited funding sources, which I could then recommend “Auti” implement in order to help the company become a feasible, sustainable business. In order to make the most appropriate recommendations, I had to become financially literate. A study done in Canada found that weak financial literacy may be one of the biggest reasons start-up businesses do not succeed (Intuit, 2013). 1.3 Research questions My thesis looks to answer three specific questions. Questions one and two are specific to my individual research conducted into the angel investment industry in New Zealand. 1) How do angel investors in New Zealand view the angel investment industry in New Zealand? 2) What do angel investors expect high-tech start-ups to have in place before they would consider investing? Thesis question three is related to the main theory of the thesis. 3) How relevant is the “pecking order capital structure” theory to high-tech start-up companies in New Zealand? 1.4 Contribution This thesis contributes to practice as well as theory. My interviews with angel investors are “practice led”, meaning that the research led to a new understanding about practice (Edmonds et al., 2006). In terms of my own research, a new understanding was formed on angel investment in New Zealand in 2014. Specifically, a common list of things angels throughout New Zealand look for in “high-tech” start-ups, before they would consider investing, was identified. The main theory within this thesis is to do with the “pecking order capital structure”, in relation to high-tech start-ups, therefore contributing to research done around the pecking order theory. 1.5 Thesis layout This thesis is a reflection of the two facets of research that I conducted. The two approaches used were action-based research and in-depth Interviews. Action-based research aims to contribute both to the practical concerns of people in an immediate problematic situation and to further the goals of social science at the same time (Gilmore et al., 1986). Action-based research, as mentioned in this thesis, looks into the process that was taken to find the best suited funding sources for our start-up, “Auti”. An in-depth interview was conducted with angel investors in New Zealand to get a better understanding of angel investment in New Zealand. Specific focus is put on “angel investment” in New Zealand as this is the preferred choice of start-up capital for “Auti”. The thesis begins with a literature evaluation. The first section will evaluate funding source literature that influenced us to select angel investment funding as something we wanted to get a better understanding of. Further angel investment literature will be evaluated, including the gap in literature that my individual research into angel investment fills. Research question three looks to see if our start-up, “Auti”’s capital structure follows the “pecking order capital structure”, therefore there will also be a section within the literature review chapter that will include my main findings on past research, which has been conducted around the world, looking into if high-tech start-ups, such as “Auti”, follow the “pecking order capital structure”. The definition of high-tech firms, also known as new technology based firms, is not clear, its application differs significantly depending on time, space, and authors (Laranja &Fontes, 1998; Fontes & Coombs, 2001). One way it has been defined by Little (1977) is “independent owned business established for not more than twenty-five years and based on the exploitation of an invention or technological innovation implying substantial technological risks”. Following the literature review chapter, my research methodology is described, specifically with regards to my individual research into angel investment in New Zealand, explaining what I did, why, and problems that I faced. The thesis then follows with main findings from my individual qualitative research into the angel investment industry in New Zealand. The thesis conclusion will have six main sections. Sections will cover whether or not my research supports the literature, what my research contributions are, and an implementation section (recommending start-up funding implications for “Auti”). As my individual research looked into the angel investment industry in New Zealand, a majority of the implementation will be specific to what the “Auti” team should do in respect to approaching angel investment in order to have a higher chance of gaining investment. My recommended start-up funding implications will then be compared to the pecking order capital structure to show that it follows that structure. A section will also look into the limitations that my research faced. The last section will be recommendations in terms of further research needed to be conducted in order to support my research conclusions.</p>

A High Tech Start-up’s Journey Towards Funding

<p>1.1 Masters background As part of the “Masters in Advanced Technology Programme” each student had to select a high-tech start-up that they wanted to be involved in throughout the year. Each individual would bring value to the start up through their background and experience. The start-up I selected was an interactive robotic toy called “Auti”. Project champion, Helen’s envisioned goal was for the toy to help children with autism learn positive behaviours. Our team consisted of two main individuals not including the product champion (Please refer to Appendix A to learn more about the team, team dynamics etc.). My individual responsibility in terms of contribution to the team was to establish a strategic business plan, including a growth strategy for the project. Gaining funding is a critical part of any start-up’s growth (Ministry of Economic Development, 2007). Financial planning forces companies to think about their goals. A common goal most companies have is the goal to grow (Ross et al., 2002). 1.2 Objectives The objective of this study was to identify the best suited funding sources, which I could then recommend “Auti” implement in order to help the company become a feasible, sustainable business. In order to make the most appropriate recommendations, I had to become financially literate. A study done in Canada found that weak financial literacy may be one of the biggest reasons start-up businesses do not succeed (Intuit, 2013). 1.3 Research questions My thesis looks to answer three specific questions. Questions one and two are specific to my individual research conducted into the angel investment industry in New Zealand. 1) How do angel investors in New Zealand view the angel investment industry in New Zealand? 2) What do angel investors expect high-tech start-ups to have in place before they would consider investing? Thesis question three is related to the main theory of the thesis. 3) How relevant is the “pecking order capital structure” theory to high-tech start-up companies in New Zealand? 1.4 Contribution This thesis contributes to practice as well as theory. My interviews with angel investors are “practice led”, meaning that the research led to a new understanding about practice (Edmonds et al., 2006). In terms of my own research, a new understanding was formed on angel investment in New Zealand in 2014. Specifically, a common list of things angels throughout New Zealand look for in “high-tech” start-ups, before they would consider investing, was identified. The main theory within this thesis is to do with the “pecking order capital structure”, in relation to high-tech start-ups, therefore contributing to research done around the pecking order theory. 1.5 Thesis layout This thesis is a reflection of the two facets of research that I conducted. The two approaches used were action-based research and in-depth Interviews. Action-based research aims to contribute both to the practical concerns of people in an immediate problematic situation and to further the goals of social science at the same time (Gilmore et al., 1986). Action-based research, as mentioned in this thesis, looks into the process that was taken to find the best suited funding sources for our start-up, “Auti”. An in-depth interview was conducted with angel investors in New Zealand to get a better understanding of angel investment in New Zealand. Specific focus is put on “angel investment” in New Zealand as this is the preferred choice of start-up capital for “Auti”. The thesis begins with a literature evaluation. The first section will evaluate funding source literature that influenced us to select angel investment funding as something we wanted to get a better understanding of. Further angel investment literature will be evaluated, including the gap in literature that my individual research into angel investment fills. Research question three looks to see if our start-up, “Auti”’s capital structure follows the “pecking order capital structure”, therefore there will also be a section within the literature review chapter that will include my main findings on past research, which has been conducted around the world, looking into if high-tech start-ups, such as “Auti”, follow the “pecking order capital structure”. The definition of high-tech firms, also known as new technology based firms, is not clear, its application differs significantly depending on time, space, and authors (Laranja &Fontes, 1998; Fontes & Coombs, 2001). One way it has been defined by Little (1977) is “independent owned business established for not more than twenty-five years and based on the exploitation of an invention or technological innovation implying substantial technological risks”. Following the literature review chapter, my research methodology is described, specifically with regards to my individual research into angel investment in New Zealand, explaining what I did, why, and problems that I faced. The thesis then follows with main findings from my individual qualitative research into the angel investment industry in New Zealand. The thesis conclusion will have six main sections. Sections will cover whether or not my research supports the literature, what my research contributions are, and an implementation section (recommending start-up funding implications for “Auti”). As my individual research looked into the angel investment industry in New Zealand, a majority of the implementation will be specific to what the “Auti” team should do in respect to approaching angel investment in order to have a higher chance of gaining investment. My recommended start-up funding implications will then be compared to the pecking order capital structure to show that it follows that structure. A section will also look into the limitations that my research faced. The last section will be recommendations in terms of further research needed to be conducted in order to support my research conclusions.</p>

Seed-Stage Success and Growth of Angel Co-investment Networks

Using hand-collected data, we show that coinvestment is widespread in the angel investment market, even among seed-stage startups. Individual angels with demonstrated seed-stage success experience an increase in the quantity, quality, and geographic and industry spread of their coinvestment connections relative to unsuccessful peers and are rewarded with more deal flow. These results are stronger for less-established angels and for angels whose successes are more indicative of their ability. Success also begets more success: the portfolio companies of successful angels are more likely to receive follow-on financing, especially from VC firms. Our results highlight how angels grow their coinvestment networks. (JEL G24, L14, L26, M13). Received June 8, 2020; editorial decision June 21, 2021 by Editor Isil Erel. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

Policies to Promote Angel Investment in Startups in Some Countries in Southeast Asia

Angel investor plays an important role in the startup ecosystem, and is a factor that fills the capital gap for startups and also brings many benefits to startups when they can accompany and support expertise, management and consulting for startups. In the early stage of establishment and development of the startup ecosystem, the role of governments was important in issuing policies and providing solutions to promote angel investment. For Vietnam, encouraging angel investors to invest in startups is an important policy in developing the startup ecosystem. With research on policies to promote angel investment in startups in some countries in Southeast Asia including: Singapore, Thailand and Malaysia, the article summarizes some experiences to promote angel investment in startups in Vietnam. Keyword: Angel investor, startup. References [1] Investopedia, Angel Investor, https://investopedia.com/terms/a/angelinvestor.as, 2020 (accessed on 03/9/2020).[2] Startup SG, Overview Singapore’s Startup Ecosystem, https://www.startupsg.gov.sg/, 2020 (accessed on 03/9/2020).[3] WTO and International Trade Center - VCCI, research report: Mechanism to support Innovative Startups: International Experience – Proposed solutions for Vietnam, https://wtocenter.vn/an-pham/13265-study-mechanism-to-support-innovative-startups-international-experience---proposed-solutions-for-vietnam, 2017 (accessed on 03/9/2020).[4] Kam, W.P. Overview of angel investing in Singapore, Tech in Asia, https://www.techinasia.com/overview-of-angel-investing-in-singapore/, 2011 (accessed on 03/9/2020).[5] Enterprise Singapore, SEEDS Capital - Enterprise Singapore, https://www.enterprisesg.gov.sg/financial-assistance/investments/investments/seeds-capital/overview, 2020 (accessed on 03/9/2020).[6] Guide Me Singapore, Singapore Tax Deduction Scheme for Angel Investors, https://www.guidemesingapore.com/business-guides/taxation-and-accounting/personal-tax/tax-deduction-scheme-for-angel-investors, 2020 (accessed on 03/9/2020).[7] Startup Angels, Bangkok Startup Angels, https://startupangels.com/market/bangkok/, 2017 (accessed on 03/9/2020).[8] Embassy of the Kingdom of the Netherlands in Bangkok, Startup Ecosystem Thailand, www.nederlandenu.nl›startup-thailand-factsheet, 2019 (accessed on 03/9/2020).[9] DFDL, Thailand Tax Update: New Tax Incentives for Angel Investors, Jonathan Blaine, https://www.dfdl.com/resources/legal-and-tax-updates/thailand-tax-update-tax-incentive-for-angel-investor/, 2018 (accessed on 03/9/2020).[10] Ajagbe Akintunde Musibau, Ismail Kamariah, The Financing of Early Staged Technology Based Firms in Malaysia, Middle-East Journal of Scientific Research (2013) 18 (5): 697-707, DOI: 10.5829/idosi.mejsr.2013.18.5.11747[11] Malaysian Business Angels Network, 2018 Annual Report, https://mban.com.my/wp-content/uploads/ 2019/05/Annual-Report.pdf, 2019 (accessed on 03/9/2020).[12] Malaysian Business Angels Network, Angel Tax Incentive, https://mban.com.my/angel-tax-incentive/, 2020 (accessed on 03/9/2020).[13] Malaysia Business Angel Network, Angel Investor Application Explanatory Notes and Guidance Note, https://mban.com.my/wp-content/uploads/2017/04/Angel-Application_ Explanatory-Notes.pdf, 2017 (accessed on 03/9/2020).

Gender Diversity Effects in Investment Decisions

This study examines the gender gap in investment decisions in a prominent setting: the American TV show Shark Tank. Our study is based on a sample of 895 pitches from 10 seasons comprising 222 episodes from 2009 to 2019. Contradicting prior research, our findings suggest that female entrepreneurs are not discriminated against in pitch success rates, independent of their respective industrial settings. We find that the valuations from the entrepreneurs themselves (males overvalued their ventures by 57.19%) and final deal valuations (male deals were overvalued by 50.50%) are significantly lower for females, hinting towards a self-imposed gender gap in entrepreneurship and angel investing. As the gender gap in entrepreneurship and angel investment seems to result from a lower rate of entrepreneurial intentions by women, we suggest fostering female entrepreneurship by raising the number of female entrepreneurs and business angels who may serve as role models among those potential female entrepreneurs and business angels at the brink of becoming actual entrepreneurs, as demonstrated in Shark Tank. Particularly, in teams, mixed founder teams consisting of males and females may support the creation of promising start-ups with viable business models.

Innovation articles.

In this chapter, ten entrepreneurs who have led the establishment of their companies and are vigorously leading their development, share their motivations and insights. Hear from those who now lead international well-established enterprises to those who are emerging from the start-up or pilot phase and continue to work towards that first significant grant, or angel investment, that will enable them to take the first step to scale up.