Previous researchers (Sahlman, 1990; Timmons, 1994) found that entrepreneurial firms receiving outside capital funding had higher success rates. The implication that something beyond the financial transactions transpired between the angel investor and the entrepreneur is suggested but not fully developed. This study builds from previous researchers (Chandler & Hanks, 1998; Gimeno, Folta, Cooper & Woo, 1997; Mayfield, 2000; Stuart & Abetti, 1990; Zacharakis & Eshghi, 1997) who anecdotally noted non-financial methods in which angels assisted entrepreneurs and the affects of information asymmetry on the angel-entrepreneur relationship.

Mayfield (2000) supported this issue with the application of the Prisoner’s Dilemma theory to the developing relationship between the angel and entrepreneur. Baron and Shane (2005) concluded that information asymmetry within the angel-entrepreneur relationship influences the exchange of information, and potentially affects knowledge transference, thereby inhibiting the success of the venture.

Within the context of information asymmetry, the purpose of this study is to determine what non-financial knowledge do angel investors transfer to entrepreneurs and concomitantly, how much of this knowledge do entrepreneurs receive.