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

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

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


Conference2014 Babson College Entrepreneurship Research Conference

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ID: 19339668