Does religion matter to angels? Exploring the influence of religion in entrepreneurial investor decision-making.

Despite the pervasive influence religion has on society, the role of religion in angel investor decision-making remains unknown. This study tests a model of how religion – both as a guiding institutional logic and a personal religious belief – influences angel investor evaluations. Drawing on the similarity attraction paradigm and expectancy violation theory, two scenario-based experiments find religion has a persistent but nuanced influence on investor evaluations. Generally, religious claims are a double-edged sword, either repelling or attracting angel investors. Specifically, faith-driven investors form positive evaluations of the venture but only when these evaluations are mediated by entrepreneur authenticity. By comparison, traditional angel investors form negative evaluations when religious claims are present, except for when angel investor religiosity is high. This suggests that faith-driven and traditional angel investors use different bases for evaluating entrepreneurs and ventures. Overall, our results have important implications for understanding the theological turn to entrepreneurship by finding religion as a double-edge sword, a multilevel influence, and a cognitive mechanism within investor decision-making. Plain English Summary: This research analyzes angel investor evaluations of religious claims made by entrepreneurial ventures. We conduct two experimental studies – one with faith-driven angel investors and another with traditional angel investors – and find religious claims are a double-edged sword. Our findings suggest that the dominant institutional context, either an economic return on investment or a religious mission, will drive whether investors resonate with religious claims made about the venture and entrepreneur. Interestingly, we find that religious claims are not universally evaluated and show when repelling effects are mitigated or aligning effects are not as strong as expected. Our results suggest religion has both positive and negative influences in angel decision-making, occurs at multiple levels, and is driven largely by beliefs rather than practices. [ABSTRACT FROM AUTHOR]

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