Trustworthiness: A Critical Ingredient for Entrepreneurs Seeking Investors

By Andrew L. Maxwell, Moren Lévesque. Social Science Research Network, 2014

132 citations recorded by the source corpus.

We investigate how an entrepreneur's behaviors during an initial interaction with a business angel can build, damage, or violate trust, and how the investor's level of trust (prompted by the entrepreneur's behavior) can affect his/her decision to make an investment offer. Our empirical analysis shows that entrepreneurs who receive offers from business angels exhibit a larger number of trust–building behaviors during the initial interaction and a smaller number of unintentional trust–damaging behaviors than those who do not receive an offer, and display few deliberate trust–violating behaviors. We further observe that the investor's deployment of a control mechanism is a prerequisite for receiving an investment offer for all entrepreneurs who damage or violate trust.

Subfields: Accounting, Safety Research

View Paper: https://www.semanticscholar.org/paper/4f8a64621e6619482d216610f7ec8c18f0f31759