Angel group members' decision process and rejection criteria: A longitudinal analysis

• First longitudinal analysis of angel group members' (AGMs) decision process
• We collect, analyze and code each rejection reason, for 636 proposals.
• We show differences between the AGMs' process and that of individual angels.
• AGMs seem to focus on market risk, similar to venture capitalists.
• Inexperienced entrepreneurs do not get financing because of weak proposals.

This paper investigates business angel group members' decision-making from project submission to the final decision. Using a Canadian group's archival data on 636 proposals, we provide a detailed longitudinal analysis of the decision process. The rejection reasons generally refer to market and execution risk; this finding holds for every step of the process for proposals that pass the pre-screen. Angel group members focus more on market and execution risk than agency risk, similar to venture capitalists. Inexperienced entrepreneurs are rejected for market and product reasons. Decision-making by the studied angel group members differs from that generally described for independent angels.