Unpacking the black box of informal investments: deal origination, motivation, and context dependence

Ekaterina Murzacheva, Jonathan Levie

    Research output: Chapter in Book/Report/Conference proceedingConference contribution

    Abstract

    The objective of the paper is to explore the nature of the relationship between an entrepreneur and an informal investor – a non-professional private investor (a family member, or a friend) – at the early stages of business development. Although informal investments have been acknowledged to be an important source of finance for starting businesses, the process of decision-making and its context have not been addressed so far. The study attempts to explore the motivation of an entrepreneur and an informal investor, their interaction, and the impact of external environment. It is emphasized that bonding social ties would impose biases on both actors, shifting their expectations, risk awareness, and the perception of responsibilities. Moreover, when alternative sources become less available, the importance of social networks grows, thus accelerating the occurrence of the phenomenon.
    Original languageEnglish
    Title of host publicationFrontiers of Entrepreneurship Research 2014
    PublisherBabson College
    ISBN (Print)0-910897-40-9
    Publication statusPublished - 4 Jun 2014
    Event2014 Babson College Entrepreneurship Research Conference - London, Canada
    Duration: 4 Jun 20147 Jun 2014

    Conference

    Conference2014 Babson College Entrepreneurship Research Conference
    Country/TerritoryCanada
    CityLondon
    Period4/06/147/06/14

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