Trustworthiness: A Critical Ingredient for Entrepreneurs Seeking Investors
Article first published online: 3 JUL 2011
© 2011 Baylor University
Entrepreneurship Theory and Practice
How to Cite
Maxwell, A. L. and Lévesque, M. (2011), Trustworthiness: A Critical Ingredient for Entrepreneurs Seeking Investors. Entrepreneurship Theory and Practice. doi: 10.1111/j.1540-6520.2011.00475.x
- Article first published online: 3 JUL 2011
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.