Why business angels reject investment opportunities: Is it personal?

A major focus of research on business angels has examined their decision-making processes and investment criteria. As business angels reject most of the opportunities that they receive, this article explores the reasons informing such decisions. In view of angel heterogeneity, investment opportunities might be expected to be rejected for differing reasons. Two sources of data are used to examine this issue. Face-to-face interviews with 30 business angels in Scotland and Northern Ireland provided information on typical ‘deal killers’. This was complemented by an Internet survey of United Kingdom that attracted responses from 238 UK business angels. The findings confirm that the main reason for rejection relates to the entrepreneur/management team. However, angel characteristics do not explain the number of reasons given for opportunity rejection nor do they predict the reasons for rejecting investment opportunities. This could be related to the increasing trend for business angels to join organised groups which, in turn, leads to the development of a shared repertoire of investment approaches. We suggest the concept of ‘communities-of-practice’ as an explanation for this finding

Business angels

Business angels are conventionally defined as high net worth individuals who invest their own money, along with their time and expertise, directly in unquoted companies in which they have no family connection, in the hope of financial gain. The term angel was coined by Broadway insiders in the early 1900s to describe wealthy theatre-goers who made high risk investments in theatrical productions. Angels invested in these shows primarily for the privilege of rubbing shoulders with the theatre personalities that they admired. The term business angel was given to those individuals who perform essentially the same function in a business context (Benjamin and Margulis, 2000: 5). There is a long tradition of angel investing in businesses (Sohl, 2003). Moreover, angel investing is now an international phenomenon, found in all developed economies and now diffusing to emerging economies such as China (Lui Tingchi, and Chen Po Chang,, 2007). However, it has only attracted the attention of researchers since the 1980s

Backing the horse or the jockey? Due diligence, agency costs, information and the evaluation of risk by business angel investors

This paper explores the argument that business angel investors are more concerned with managing and minimising agency risk than market risk. Based on data on the due diligence process from a survey of business angels in the UK, the paper concludes that business angels do view entrepreneur characteristics and experience as having the greatest impact on the perceived riskiness of an investment opportunity. Further, they emphasise personal and informal over formal sources of information in the due diligence process, and seek information on both the entrepreneur and the venture in determining valuation. Indeed, the reliance of business angels on short-term and subjective information to value investment opportunities leads to the conclusion that their approach to valuation is not a function of the conventional protocols of financial analysis, but of personal relations and assessment

Applications of Distributed Optimal Control in Economics-The Case of Forest Management

This paper presents a theoretical model to find the optimal selective-logging regime of a size-distributed forest. The law of motion of the economic model is governed by a partial differential equation that describes the evolution of the forest stock over time. To find the solution of the resulting distributed optimal control problem, we propose a numerical solution technique known as "Escalator Boxcar Train" used in Biology, for the study of dynamics of physiologically structured populations. The empirical part of the paper determines the optimal selective-logging regime of a size-distributed forest, that is, the selective logging that maximizes the discounted net benefits from timber production of a stand of pinus sylvestris, over an infinite time horizon, and compares the selective logging with the clear-cutting regime.Distributed optimal control, diameter-distributed forest, Escalator Boxcar Train.

Gene Regulatory Networks controlling Arabidopsis Root Stem Cells

Conferencia sobre aproximaciones sistémicas al conocimiento biológicoGene Regulatory Networks controlling Arabidopsis Root Stem Cells Identifying the transcription factors (TFs) and associated regulatory processes involved in stem cell regulation is key for understanding the initiation and growth of tissues and organs. Although many TFs have been described in the Arabidopsis root stem cells, a comprehensive view of the transcriptional signature of the stem cells is lacking. We used a systems biology approach to predict interactions among the genes involved in stem cell identity and maintenance. We first transcriptionally profiled four stem cell populations and developed a gene regulatory network (GRN) inference algorithm, GENIST, which combines spatial and temporal transcriptomic datasets to identify important TFs and infer gene-to-gene interactions. Our approach resulted in a map of gene interactions that orchestrates the transcriptional regulation of stem cells. In addition to linking known stem cell factors, our resulting GRNs predicted additional TFs involved in stem cell identity and maintenance. We mathematically modeled and experimentally validated some of our predicted transcription factors, which confirmed the robustness of our algorithm and our resulting networks. Our approach resulted in the finding of a factor, PERIANTHIA (PAN), which may play an important role in stem cell maintenance and QC function. We then developed an imaging system to perform in vivo, long-term imaging experiments that will be used to understand the dynamics of the regulatory interactions between PAN and its downstream TFs in a cell-specific manner. For this, we designed and 3-D printed a Multi-sample Arabidopsis Growth and Imaging Chamber (MAGIC) that provides near-physiological imaging conditions and allows high-throughput time-course imaging experiments in the ZEISS Lightsheet Z.1. We showed MAGIC’s imaging capabilities by following cell divisions, as an indicator of plant growth and development, over prolonged time periods, and demonstrated that plants imaged with our chamber undergo cell divisions for >16 times longer than those with the glass capillary system supplied by the ZEISS Z1. Future in vivo observations of the expression of PAN and its predicted downstream factors will be key to refine our model predictions and obtain information about the dynamics of the regulatory processes. Our systems biology approach illustrates the strength of integrating computational and technological tools into the experimental approaches to solve key biological questions. We anticipate that our algorithm and our approach can be applied to solve similar problems in a diverse number of systems, which can result in unsupervised predictions of gene functions and gene candidates.Universidad de Málaga. Campus de Excelencia Internacional Andalucía Tech

Further Theoretical Analysis on the K−3He→ΛpnK^{-} {}^{3} \text{He} \to \Lambda p n Reaction for the KˉNN\bar{K} N N Bound-State Search in the J-PARC E15 Experiment

Based on the scenario that a $\bar{K} N N$ bound state is generated and it eventually decays into $\Lambda p$, we calculate the cross section of the $K^{-} {}^{3} \text{He} \to \Lambda p n$ reaction, which was recently measured in the J-PARC E15 experiment. We find that the behavior of the calculated differential cross section $d ^{2} \sigma / d M_{\Lambda p} d q_{\Lambda p}$, where $M_{\Lambda p}$ and $q_{\Lambda p}$ are the $\Lambda p$ invariant mass and momentum transfer in the $(K^{-} , \, n)$ reaction in the laboratory frame, respectively, is consistent with the experiment. Furthermore, we can reproduce almost quantitatively the experimental data of the $\Lambda p$ invariant mass spectrum in the momentum transfer window $350 \text{ MeV} /c < q_{\Lambda p} < 650 \text{ MeV} /c$. These facts strongly suggest that the $\bar{K} N N$ bound state was indeed generated in the J-PARC E15 experiment.Comment: 4 pages, 4 EPS figures, talk given at the 8th International Conference on Quarks and Nuclear Physics (QNP2018), Tsukuba, Japan, 13-17 November, 201

Indulgent angels or stingy venture capitalists? The entrepreneurs' choice

This paper studies entrepreneurs' choice of investors, who must provide financial capital and effort for projects with externalities. Venture capitalists (VCs) and individual investors (angels) compete to finance the projects. VCs seek to invest into a portfolio of projects, while angels have more slack in how much they invest into one project. In the presence of externalities between projects, VCs can potentially increase the total value of their investment portfolio through better coordination of investment, while some angels behave indulgently and give more financial investment than necessary, earning zero profits in equilibrium. Surprisingly, externalities do not give VCs as much of an advantage as one would expect. Quite often VCs lose out to angels even when this means that some projects will not receive an optimal amount of effort. In the projects they invest in, VCs always make strictly positive profits despite the competition.investment choice; venture capitalist; angel; project financing