The Effects of New Ventures’ Resource Strategies on Angels’ Investing Outcomes: Big Gains and Big Losses in Angel Investments

Based on a sample of 539 angel investors, we empirically test the impact of new ventures’ resource acquisition/allocation strategies in different development stages on angels’ abnormal returns and their extremeness. Our findings suggest that at earlier stages, ventures whose entrepreneurs focus more on securing new resources tend to not only give angel investors lower abnormal returns, but also push the angel’s returns to extreme points. In contrast, ventures whose entrepreneurs focus more on utilizing current resources tend to not only give angel investors higher abnormal returns, but also pull angel’s returns back to the industry average.