Angel Investors (Angels) fund high-risk projects in their early stages. The unique Angels’ feature is that they mindless about financial analysis during decision-making. Correspondingly, the researchers assessed the factors affecting financiers’ due diligence using four hypotheses. The study proposes that the venture capitalists’ experience does not affect their funding decisions. Secondly, the top management’s capability does not influence sponsors’ focus on due diligence. Thirdly, the project development level does not alter associates’ investment resolutions. Lastly, the investigators sum up the first three propositions to establish the general supposition that behavioral factors have no impact on entrepreneurs’ decisiveness.
The analysts used the Angels’ data set, which has 86 investor groups’ responses and 539 funders of 3,097 projects from 1972 to 2007, to obtain the relevant information to test the formulated hypotheses. Since the data extensively varies, the investigators transformed a total of 277 responses to achieve an average due diligence time of 34.3 hours and a standard deviation of 48.8 hours. The essence of information collection was to predict behavioral elements’ effect on the time business persons spend assessing projects’ feasibility before financing. Correspondingly, the researchers utilized Poisson regression to accomplish data analysis.
The researchers had proposed null hypotheses regarding the factors that influence institutions’ due diligence, and the findings indicate that all the propositions are untrue. In this case, capitalists’ experience, top management’s expertise, and the project development stage affect shareholders’ time expenditure on financial analysis before investing, implying that behavioral elements impact industrialists’ decision-making. Consequently, the exposure patrons have hard in funding makes them keener when deciding. Moreover, the leadership’s proficiency matters when assessing viable projects whereby high administration’s competence reduces the due diligence time. Besides, Angels expend more time on financial analysis as the project advances from seed to startup stages.