Who is more likely to become business angels? Evidence of business angels and potential business angels from China

Abstract

Purpose

The paper is aimed to obtain a clear understanding of influence factors that can increase the possibility to be business angels (BA).

Design/methodology/approach

This study develops the 3A model in the Chinese context to design questionnaire, and 334 questionnaires are obtained via focus group sample and targeted snowball approach, and the multinomial logit analysis is used to test a serious of hypotheses.

Findings

The paper confirmed that the entrepreneurial experience and wealth are determinants of investment for potential BA, and the wealth have both directly and indirectly positive influence on investment activity through risk preference, namely that richer people prefer risk which impel them to invest as BA.

Research limitations/implications

There are two limitations in the paper: first, the macro environment in China has not been taken into consideration in the model; second, the source of the sample focuses on the developed cities in the middle and eastern of China, only reflect the characteristic of angels in these areas, which may somewhat diverges from the reality.

Practical implications

The paper would contribute to form the policy which could promote the development of angel investment in China.

Originality/value

This paper conducts a preliminary exploration of the factors that have impact on Chinese BA' investment activity based on current research.

Citation

Li, Y., Ling, L., Wu, J. and Li, P. (2014), "Who is more likely to become business angels? Evidence of business angels and potential business angels from China", Journal of Entrepreneurship in Emerging Economies, Vol. 6 No. 1, pp. 4-20. https://doi.org/10.1108/JEEE-06-2013-0017