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

Abstract

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.