Cheryl R. Mitteness

Do You See What I See? Signaling Effects of Gender and Firm Characteristics on Financing Entrepreneurial Ventures

In this study, we examine whether female entrepreneurs are held to a different standard than male entrepreneurs in obtaining financing from banks. To test this idea, we draw from the literature on signaling theory to propose that characteristics specific to the firm and the entrepreneur act as a means to communicate (i.e., signal) the inherent quality of the venture and thus impact the amount of capital the entrepreneur is able to obtain. We then explore the moderating role of gender based on gender role congruity theory to argue that capital providers reward the business characteristics of male and female entrepreneurs differently to the disadvantage of women.

Horse vs. Jockey? How stage of funding process and industry experience affect the evaluations of angel investors

Angel investors make evaluations at different stages of the funding process; so we explore how the importance angels place on different investment criteria varies and how industry experience impacts their evaluations. Data were collected at the screening stage as angel investors evaluated the strength of the entrepreneur and the opportunity, and made decisions regarding whether the deal should proceed to due diligence, as well as their personal interest in making an investment. Additional data were collected regarding whether these angels made an investment at the funding stage. We tested our hypotheses using a multilevel approach to account for the nested nature of the data – multiple evaluations nested within each angel, nested within each screening presentation. Our results show that the entrepreneur matters most when angels are deciding whether a deal should proceed to due diligence; opportunity strength represents a more important investment criterion when angels switch to determining whether a deal matches their own investment goals as the deal progresses through the funding process. Additionally, we find that three types of industry experience differ in their impact on the evaluation process. The findings offer new insights and underscore the importance of considering how individual characteristics impact evaluations of funding potential.

Motivational Cues and Angel Investing: Interactions Among Enthusiasm, Preparedness, and Commitment

Angel investors often make investment decisions based on motivational cues communicated during pitches—including enthusiasm, preparedness, and commitment—to evaluate potentially important qualities of entrepreneurs. We tested the independent and interaction effects of these cues by having 72 angels complete 1,995 evaluations of 133 live pitches. We found a positive effect of preparedness on angel evaluations, an effect enhanced by one form of commitment. The relationship between enthusiasm and evaluations of funding potential varies depending on the type of commitment considered. Our findings suggest that enthusiasm, preparedness, and commitment should be treated as conceptually and empirically distinct.

Extending the Role of Similarity Attraction in Friendship and Advice Networks in Angel Groups

Although similarity attraction theory is often utilized to explain why people form relationships with similar others, we utilize diversity research to look beyond surface–level demographic characteristics similarity to explain situations when angels form interpersonal relations with angels with dissimilar deep–level personal characteristics due to a strong desire to receive information and cognitive benefits. We use data collected from a chapter of one of the largest angel organizations in the United States. Our results show that although individuals often form relations with similar others, conditions exist when angels exert the extra effort required to form relations with dissimilar others.