Interest in habitual behaviour is typically underwritten by the expectation that experience gained from previous ventures leads to reduced risk and improved future performance. Success is implied by habitual angels’ re-investment behaviour because learning is thought to take place. But do previous experiences actually result in learning?

This paper explores whether angels learn or whether they the possess good investment information ex ante. In this study, two major perspectives contrast the knowledge that angels bring to their informal investments compared with the knowledge that they acquire as they conduct repeated investments. The theory of prior information explores the information that different parties bring to a decision which causes them to make different risk-oriented decisions. The theory of learning-by-doing investigates the ability of habitual angels’ to learn by having multiple investment experiences.