Andrew L. Maxwell is a doctoral candidate at the Department of Mangement Science, University of Waterloo, Ontario, Canada and Chief Innovation Officer at the Canadian Innovation Centre, Waterloo, Canada.
Trustworthiness: A Critical Ingredient for Entrepreneurs Seeking Investors
Article first published online: 3 JUL 2011
© 2011 Baylor University
Entrepreneurship Theory and Practice
Volume 38, Issue 5, pages 1057–1080, September 2014
How to Cite
Maxwell, A. L. and Lévesque, M. (2014), Trustworthiness: A Critical Ingredient for Entrepreneurs Seeking Investors. Entrepreneurship Theory and Practice, 38: 1057–1080. doi: 10.1111/j.1540-6520.2011.00475.x
We are grateful to Anton Svendrovski, Nicole Gillespie, Richard Harrison, Lisa Maillart, and Sim Sitkin for their outstanding help and insights on earlier drafts, as well as the Canadian Broadcasting Centre (CBC) for providing access to data. We are also grateful to James Fiet and two anonymous reviewers for their very thorough suggestions that have made this article much stronger. Further, we acknowledge financial support from a Standard Research Grant (#410-2008-0415) from the Social Sciences and Humanities Research Council (SSHRC) and a Discovery Grant (#341679-2007) from the Natural Sciences and Engineering Research Council (NSERC) of Canada.
- Issue published online: 3 SEP 2014
- 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.