Abstract

This paper investigates angel investors’ investment behaviors in terms of reinvestment amount and the length of a deal. Using the AIPP data, we find that angel investors reinvest higher amount when sunk costs in terms of time or prior investment are high, and the deals are sourced through the angel group. Moreover, we find that when the deal is risky and indicates positive performance trend prior to the initial investment, the investment is short-term oriented. Last, we find that lengthening a deal period decreases the likelihood of a failed exit. Implications to investment decision-making theories and angel investors are discussed.

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