The Financial Accounting Standards Board (FASB) and the Public Company Accounting Oversight Board (PCAOB) have proposed standards that could alter the judgments of users of financial statements. This study examines how certain regulations including revenue measurement choices made by management combined with risk disclosure as proposed by the PCAOB could interact with the propensity of the user to rely on financial information to affect how a class of private company financial statement users - seed equity investors - value a private company. Through experimental methods manipulating revenue measurement choice and risk disclosure, I find that seed equity investor value judgments of early stage companies are significantly influenced by accounting disclosures. Specifically, accounting disclosures regarding level of risk and revenue measurement that accompany financial models in the valuation process significantly alter a seed equity investor's value judgment of early stage companies. This segment of financial statement users tends to place the majority of their reliance on non-financial, subjective factors as predictors of future success of early stage companies. Further, their judgments are swayed by wholly different financial disclosures than their "Wall Street" investor counterparts in that conservative and low risk information creates large revisions in value judgment. The implication of this study is to suggest that "Main Street" investors consume financial information and their related disclosures differently than "Wall Street" investors - an inference important for standards setters to understand as they craft regulations that govern private companies.

The contemporary angel-symbol is deeply rooted in our cultural history, with connotations and implications leading to that inner transitional space where all creative activity takes place. This essay investigates the history of the depiction of angels, visions of angels both ancient and modern, and includes psychological aspects of symbols as such. A closer look at surrounding symbols of angels will hopefully result in a greater understanding of the role of the angel-symbol within the context of visual culture, seen in the light of our own symbolic universe.

Business Angels (BAs) are wealthy individuals whose investments in entrepreneurial ventures enable them to increase the likelihood of both attracting subsequent Venture Capital (VC) and achieving long-term venture success. Unfortunately more than 95% of entrepreneurs seeking funds from BAs are unable to do so, raising questions about whether this high failure rate might be reduced. Scholars suggest the answer lies in gaining a better understanding of the investment decision process itself and identifying why opportunities are rejected at each stage of the decision process. However, the private nature of the interaction between BA and fund-seeking entrepreneur constrains our ability to observe the multistage nature of the interaction and how rejection reasons change at each stage. As a consequence, much research relies on BA’s biased post-decision recollections, which limits our ability to understand the decision process and identify opportunities for improvement. In this research we overcome these constraints by observing interactions from the reality TV show Dragons’ Den, where fund-seeking entrepreneurs pitch their early stage businesses to five BAs. During the interaction, each BA must either make an offer to invest or provide a reason for rejection. We develop hypotheses about why this complex decision evolves over several stages, and why rejection reasons change at each stage, which we then test by coding observations and decision outcomes. We draw on research in behavioral economics and decision making to propose that BAs use heuristics to reduce their decision making effort at each stage and initially examine the criteria that are easiest to retrieve. They then assesses each opportunity based on the most easily retrieved criteria and reject those they believe unlikely to achieve their aspiration level for required return, or because the risk of failure exceeds the BA’s own risk aspiration level. We propose that during subsequent stages of the interaction, each BA audits the entrepreneur’s behaviors to assess performance and relationship risk, rejecting those where the risk level exceeds their aspiration level. We use trained observers to code the information exchanges and behavioral cues provided by the entrepreneur to find support for our hypotheses. We observe that, during the venture assessment stage, BAs do reject opportunities that fail to reach aspiration levels for investment return or investment risk, however, contrary to normative assumptions we find BAs do not trade off investment risk for investment return. For opportunities not rejected, we observe BAs assess how the entrepreneur’s behaviors and decisions inform their assessment of managerial risk and increase the likelihood of venture failure. We note BAs are more likely to reject entrepreneurs whose behaviors indicate low level of capabilities, experiences or traits, while excess traits can also increase this likelihood. For opportunities not rejected at this stage, we observe BAs audit the entrepreneur’s trust behaviors to inform their assessment of the relationship risk. We find BAs more likely to reject entrepreneurs who damage or violate trust in comparison to those who build trust. We also observe that BAs invest in entrepreneurs who damage trust, but only if they can introduce appropriate behavioral controls. Our observations help explain the multistage nature of the decision process and why opportunities are rejected at each stage. We suggest that better prepared entrepreneurs who display appropriate behaviors are less likely to be rejected. Increased understanding of the decision process enables BAs to improve their decision-making, while knowledgeable policy makers will be better able to cost-effectively deploy appropriate resources to enhance funding activities. Our observations should encourage academics to further explore entrepreneurial behaviors, perhaps adapting our research method and coding schema in future research.

Business Angels (BAs) are wealthy individuals whose investments in entrepreneurial ventures enable them to increase the likelihood of both attracting subsequent Venture Capital (VC) and achieving long-term venture success. Unfortunately more than 95% of entrepreneurs seeking funds from BAs are unable to do so, raising questions about whether this high failure rate might be reduced. Scholars suggest the answer lies in gaining a better understanding of the investment decision process itself and identifying why opportunities are rejected at each stage of the decision process. However, the private nature of the interaction between BA and fund-seeking entrepreneur constrains our ability to observe the multistage nature of the interaction and how rejection reasons change at each stage. As a consequence, much research relies on BA’s biased post-decision recollections, which limits our ability to understand the decision process and identify opportunities for improvement. In this research we overcome these constraints by observing interactions from the reality TV show Dragons’ Den, where fund-seeking entrepreneurs pitch their early stage businesses to five BAs. During the interaction, each BA must either make an offer to invest or provide a reason for rejection. We develop hypotheses about why this complex decision evolves over several stages, and why rejection reasons change at each stage, which we then test by coding observations and decision outcomes. We draw on research in behavioral economics and decision making to propose that BAs use heuristics to reduce their decision making effort at each stage and initially examine the criteria that are easiest to retrieve. They then assesses each opportunity based on the most easily retrieved criteria and reject those they believe unlikely to achieve their aspiration level for required return, or because the risk of failure exceeds the BA’s own risk aspiration level. We propose that during subsequent stages of the interaction, each BA audits the entrepreneur’s behaviors to assess performance and relationship risk, rejecting those where the risk level exceeds their aspiration level. We use trained observers to code the information exchanges and behavioral cues provided by the entrepreneur to find support for our hypotheses. We observe that, during the venture assessment stage, BAs do reject opportunities that fail to reach aspiration levels for investment return or investment risk, however, contrary to normative assumptions we find BAs do not trade off investment risk for investment return. For opportunities not rejected, we observe BAs assess how the entrepreneur’s behaviors and decisions inform their assessment of managerial risk and increase the likelihood of venture failure. We note BAs are more likely to reject entrepreneurs whose behaviors indicate low level of capabilities, experiences or traits, while excess traits can also increase this likelihood. For opportunities not rejected at this stage, we observe BAs audit the entrepreneur’s trust behaviors to inform their assessment of the relationship risk. We find BAs more likely to reject entrepreneurs who damage or violate trust in comparison to those who build trust. We also observe that BAs invest in entrepreneurs who damage trust, but only if they can introduce appropriate behavioral controls. Our observations help explain the multistage nature of the decision process and why opportunities are rejected at each stage. We suggest that better prepared entrepreneurs who display appropriate behaviors are less likely to be rejected. Increased understanding of the decision process enables BAs to improve their decision-making, while knowledgeable policy makers will be better able to cost-effectively deploy appropriate resources to enhance funding activities. Our observations should encourage academics to further explore entrepreneurial behaviors, perhaps adapting our research method and coding schema in future research.

Zugl.: Köln, Fachhochsch., Diplomarbeit.

Zugl.: Leipzig, Handelshochsch., Diss., 2008

Zugl.: Leipzig, Handelshochsch., Diss., 2008.

Background:Business Angels (BA) and Angel Investment Organizations (AIO) have become an essential source of capital for entrepreneurs, whereas Business Angel Groups (BAG) are the most recent organizational form in which Business Angels organize themselves. However, BAG still face several issues that prevent them from success in the long term, such as identifying the right members and creating membership engagement. Consequently, why these forms still fail remains unknown. Although, research on how new organizational forms emerge has received considerable attention. There are missing explanations for why they fail. Moreover, the reasons why organizations build legitimacy has been thoroughly investigated. Nevertheless, legitimacy in the emergence of new organizational forms has been neglected. Purpose:This study explores the emergence of a new stable organizational form through the lens of legitimacy. The main goal is to understand how legitimacy judgments can influence the emergence of a new form and how an organization can affect this process. The purpose is to contribute to the literature about AIO, emerging new organizational forms, and legitimacy. Method:Based on a retroactive longitudinal qualitative single case study, the researchers used grounded theory to derive a new theory from data. The study follows the Gioia method, a systematic inductive approach to concept development. The primary data consisted of 18 semi-structured interviews with practitioners, case informants, and context informants, triangulated with secondary data from documents, articles, and websites. Conclusion:The findings indicate that unstable organizations face problems aligning legitimacy judgments. Consequently, if successfully aligned, a new stable organizational form emerges. First, our findings contribute to the literature on the emergence of new organizational forms by including legitimacy processes. Second, we contribute to the framework of legitimacy by highlighting the importance of micro-meso-macro interrelationships. Finally, the findings contribute to the BA literature by providing a new form of AIO, named Business Angel Fund (BAF), that enables legitimacy alignment and solves current issues.

In this essay, I argue that the angel Raphael introduces a poetic sensibility into Paradise in order to provide Adam and Eve with “equipment for living” after the Fall. Unlike other critics who have interpreted Raphael as a poet, I focus on the implications of Raphael’s poetic teaching for postlapsarian life. I also call attention to the dangerous effects of Raphael’s “song,” which awakens Adam’s insatiable curiosity about forbidden subjects even as Raphael cautions him to practice temperance and “be lowly wise.” Raphael aims to both “delight and instruct” his audience through poetic discourse, but Milton shows him struggling as Adam’s delight interferes with the angel’s efforts to instruct him. I discuss Raphael’s attempts to mitigate Adam’s enthrallment at his words through disclaimers that remind him to remain temperate in his pursuit of knowledge and to resist subjection to beauty and pleasure—including the charm of “song.” Through Raphael’s meditations on the challenges of poetic representation, Milton reflects on the double-sided nature of his own craft. My essay seeks to reconcile the beneficial purpose of Raphael’s visit with its troubling effects. By reading Raphael’s careful efforts to temper and reorient Adam’s curiosity alongside Milton’s statements on the value of literature in Areopagitica, I explore Milton’s sense of how pleasure, doubt, and even temptation—if rightly tempered—can aid fallen humans in the cultivation of faithful obedience. / text

Surrogate motherhood abounds in nineteenth-century fiction. Governesses, nurses, aunts, and close family friends often form strong attachments with young girls, guiding them through life and their comings-of-age. Many surrogate mothers train their “daughters” according to the rules of societal expectations that mothers and daughters have cordial, respectful relationships, where the mother is unselfish, loving, and sympathetic toward her respectful, obedient, honest daughter. Many other nineteenth-century novels, however, depict surrogate mothers who are cruel, selfish, and unloving toward their “daughters.” While the role of the surrogate mother exists in various forms, it is regardless a strong presence in nineteenth-century fiction that leads daughters to choose to become surrogate mothers themselves.