Adaptive conjoint analysis for the vitalisation of angel investments by entrepreneurs

ABSTRACT

In order to promote angel investments, attracting those who have entrepreneurial experience is necessary because their capital, unique managing experience, and business insight are highly beneficial to the performance of the investment. This can be accomplished by providing a preferred investment environment for potential angels who have entrepreneurial backgrounds. In this paper, we use an adaptive conjoint analysis to identify preferred investment environments represented as a combination of support policies for business angels who have entrepreneurial experience in Korea. Of particular interest is a preference for angel insurance. This insurance is newly proposed based on prospect theory, which explains that people tend to be more sensitive to a loss than to a gain. The value of the angel insurance is compared to those of tax policies and matching funds for business angels. The empirical results are expected to contribute to promoting angel investments by attracting entrepreneurs to become business angels.

KEYWORDS:

• Angel
• entrepreneurship
• government policy/regulation

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes on contributors

Jung Woo Suh is a graduate student at the Department of Information and Industrial Engineering, Yonsei University. His research area covers SMEs, angel investment, and venture capital. Address: [email protected].

So Young Sohn is a Professor of Industrial Engineering at Yonsei University in Korea. Her research areas include engineering education, technology management, marketing, quality and reliability engineering. Detailed information about her teaching and research areas can be found at http://isl.yonsei.ac.kr.

Additional information

Funding

This work was supported by the National Research Foundation of Korea (NRF) grant funded by the Korea government (MSIP) (2013R1A2A1A09004699).