Investing Human Capital: Business Angel Cognition and Active Involvement in Business Angel Groups

Abstract : The present research sets out to reach a better understanding of the determinants of business angels’ active involvement within business angel groups, as well as the building of cognitive resources and the sharing of skills. We develop a conceptual framework in which business angels’ decision-making style and professional experience are key in explaining their degree and type of involvement with different business angel group activities. To test the related proposals, we conduct a questionnaire survey among the members of one of the largest business angel groups in France. Our results show that business angels with a control-oriented decision-making style, as well as angels with previous professional experience as a CEO or in marketing and sales, tend to be more actively involved in key business angel group activities, both in terms of investment-related activities and business angel group management activities. While discussing the results, we propose a tentative model of business angel group cognition and outcomes for future studies that may build on the present research.