Evaluation of early stage start-ups by business angels: Indian evidence

This study identifies the factor that business angels take into consideration in their investment evaluation process. The study is based on an analysis of primary data obtained from a survey study of 90 Indian angel investors engaged in the financing of early stage start-ups. Thirty one factors used in this study are classified under four broad considerations, including entrepreneurial consideration, product consideration, financial and market consideration. In the first part of the analysis, we identified the pecking order of importance of these factors. Following this the study analysed whether investment fit influenced angels' preference for projects. The study also analysed the relative importance of the 31 factors in the process of investment appraisal before carrying out a disaggregated analysis of the data to identify the interaction between investment fit and the relative importance of the factors that influenced investment appraisal.