Explaining the Involvement and Investment of Women in Business Angel Groups: The Impact of Organizational Context and Investment Experience

Authors
Laurence Cohen,  iaelyon School of Management, Université Jean Moulin
Cristiano Bellavitis, Whitman School of Management, Syracuse University
Peter Wirtz, Emlyon Business School


Journal (Year)
Journal of Corporate Finance (2025)

Summary
Female business angels are more involved and invest more in female-only groups than in male-dominated ones, with investment experience mitigating stereotype threats in male-dominated settings.

Research Questions
The research questions addressed in the study are:

How does the organizational context (female-only versus male-dominated angel groups) influence the involvement and investment behavior of female business angels?

Does investment experience moderate the impact of stereotype threats on female business angels' investment activities and cumulative investment amounts in male-dominated groups?

What We Know
Female business angels remain underrepresented, particularly in male-dominated investment environments, and often invest less than men due to stereotype threats. Policymakers, entrepreneurs, and angel networks care because supporting female investors fosters gender equity and enhances access to capital for female-led ventures.

Novel Findings
This study is the first to empirically test the impact of organizational context on female BAs’ investment behavior at the individual level. It identifies investment experience as a crucial buffer against stereotype threats, providing a nuanced understanding of how gender dynamics affect investment activities in different settings.


Implications for Practice
Creating female-only angel groups can offer a safe environment for women to fully engage in investment activities, build confidence, and overcome barriers posed by stereotype threats. Encouraging mentorship and training within male-dominated groups can also help female BAs gain investment experience and confidence, facilitating their integration.

Implications for Policy
Policymakers should promote initiatives that support the formation of female-only angel groups and provide targeted training programs to address stereotype threats. Enhancing the visibility of successful female investors and female-led ventures can inspire more women to participate in the entrepreneurial finance ecosystem.

Implications for Society
The study’s findings have significant societal implications by addressing gender disparities in entrepreneurial finance. Promoting female participation in business angel investing helps break stereotypes and fosters a more inclusive investment ecosystem. Increased involvement of women in angel investing not only empowers female investors but also enhances access to capital for female-led ventures, which are often underfunded. This shift can stimulate economic growth, encourage diversity in entrepreneurial innovation, and create role models for aspiring women in finance and entrepreneurship, ultimately contributing to greater gender equity in traditionally male-dominated industries.

Implications for Research
Future research should explore the long-term impact of female-only angel groups and investigate other factors, such as psychological attributes, that influence women’s investment behavior. Examining alternative measures of investment experience and expanding the study to other geographical and cultural contexts can also provide deeper insights.

Full Citation
Cohen, L., Bellavitis, C., & Wirtz, P. (2024). Explaining the involvement and investment of women in business angel groups: The impact of organizational context and investment experience. Journal of Corporate Finance, 102729.

Abstract This study examines how organizational context and investment experience affect the involvement and investment behavior of female business angels (BAs). Using stereotype threat theory, it compares female BAs in female-only groups, male-dominated groups, and male BAs in male-dominated groups. Findings reveal that female BAs in female-only groups exhibit greater investment involvement and cumulative investments than those in male-dominated groups, highlighting the role of stereotype threat. Moreover, investment experience moderates these effects, enabling experienced female BAs in male-dominated groups to overcome stereotype threats. The study provides insights into addressing gender disparities in angel investing.

Web URL for the Article
https://doi.org/10.1016/j.jcorpfin.2024.102729