Angel Investors: Examining Behavioral Finance Factors Influencing Investment Selection

Subject Areas : Financial Knowledge of Securities Analysis

Yahya Hassas yeganeh ¹ , M. H. Ebrahimi Sarv Olia ² , S. Soroush Ghazi nouri ³ , Adel Afkhami ⁴

1 - Faculty member of Allameh Tabataba’i University, Tehran, Iran
2 - Faculty member of Allameh Tabataba’i University, Tehran, Iran
3 - Faculty member of Allameh Tabataba’i University, Tehran, Iran.
4 - PhD Student in Financial Management, Allameh Tabataba’i University, Tehran, Iran

Received: 2017-10-16 Accepted : 2018-03-03 Published : 2019-09-23

Keywords: Angel Investors, Behavioral Finance, Behavioral Biases, Heuristics,

Abstract :

Angel financing is a critical stage in companies' growth, which a lot of companies fail because of inability in raising money. Absorbing capital from these people is affected by various behavioral finance factors. So, this paper aims to determine and examine behavioral finance factors which affect investment selecting. In this process, after studying background and history of related research, 23 variables were collectively were given to a pilot group which we reached the consensus by removing some factors. The research questionnaire was then designed according to these remained factors. In the next step, using a sample with 183 members of angel investors, behavioral finance factors were asked. Our data were analyzed then by exploratory factor analysis. Seven latent variables include: Hope, Retrospective, Simplistic, Confidence, Risk Taking, Mental-Accounting, Self -Attribution were realized as effecting behavioral finance factors. These factors then were analyzed by confirmatory factor analysis in terms of a hypothesis to confine the number of factors to seven factors, which finally this hypothesis was accepted.

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