Abstract/Summary

Start-ups, without historical financial records, have struggled to convince banking institutions to grant them loans. Thus, business angel funds are one of the most important funding sources for start-ups. However, the number of start-ups that successfully obtain angel funds remains low. Unlike commercial financial institutions, angels’ investment decisions are bounded and influenced by behavioural factors. In the literature, considerable attention has been given to the study of investors’ decision-making; however, it is focused on examining financial credit ratings and indicators rather than behavioural credibility. The present research aims to: (i) investigate how business angels evaluate start-up behavioural credibility associated with their investment decisions; (ii) investigate how start-ups communicate their behavioural credibility; and (iii) develop an initial start-up behavioural credibility framework to establish the foundation of behavioural credibility. A qualitative research design and purposive sampling technique were adopted. Semi-structured interviews were conducted with 12 Thai business angels and four start-up entrepreneurs in Thailand. Thematic analysis was performed, and inter-rater reliability was constructed to ensure the quality of data abstraction. The outcomes of this study offer a comprehensive, multidimensional start-up behavioural credibility (SBC) framework that consists of six key components and their subcomponents. The key components are perceived trustworthiness, perceived expertise, perceived entrepreneurial spirit, socio-demographic background, social capital and gesticulation. The abstraction of socio-demographic background, social capital and gesticulation and their influences is unique. The study advances the current literature on behavioural credibility and offers new insight into how these behavioural factors influence business angels’ decision-making in the context of Thailand, an emerging market. In practice, the SBC framework can be used as a diagnostic framework for business angels and financial institutions in assessing start-ups’ or firms’ behavioural credibility as an extension of quantitative credit rating. Start-ups can also carry out a self-assessment using the framework before approaching investors, which would potentially improve their credibility standing.