Abstract
We report on business angel (BA) investing in the emerging Asian economy of Thailand. Our research question is: How can BAs survive in an emerging economy, which lacks the fully developed institutions that are necessary to support formal and informal venture capital investing? Institutional theory was used as the framework to expand BA research to an emerging economy. We interviewed 20 Thai Chinese BA investors in 2006 and 2007, and studied their investment strategies. We adopted a mixed-methods research design to analyze the data. Results indicate that the BAs find it a challenge to invest in and operate new ventures in a highly uncertain and competitive environment where there is high political uncertainty, weak legal and financial support for investors and inefficient government support for small- and medium-sized enterprises. In spite of these challenges, BAs generally report strong investment returns. To overcome weak institutional support (institutional void), BA investors develop informal institutions by co-investing and networking with family members and government officials. They also conduct in-depth due diligence before investing and closely monitor their investee companies after investing.
Acknowledgements
This research project was sponsored by the Thai Venture Capital Association and was partially funded by the Thailand Government Office of Small- and Medium-sized Enterprise Promotion. An earlier version of this article was presented at the Academy of International Business Southeast Asia Regional Conference, Ho Chi Minh City, Vietnam, December 2010.