Angel–entrepreneur relationships: demystifying their conflicts

Business angels are active investors who create long-term relationships with the entrepreneurs in the ventures in which they invest. However, in-depth knowledge on how business angels and entrepreneurs work together to create an effective investment relationship is lacking. Nevertheless, we know that the business angel–entrepreneur relationship is not always ‘rosy’ – there is also a dark side of the relationship in which various kinds of conflicts can arise. The chapter elaborates on this issue by providing a review on our knowledge about the conditions, triggers, contingencies and outcomes of conflicts in the business angel–entrepreneur relationship. The author shows that both extremes – the absence of conflict and extremely high levels of conflict – are rare in the business angel–entrepreneur relationship. When conflicts do occur, the causes have many roots, from scarce resources, personal differences, to goal incompatibilities. The impact of a conflict could have performance-related outcomes as well as individual affect- and attitude-related outcomes. The author recognizes that not all conflicts are equally good or bad – rather, it depends on the type of conflicts that occur and various moderating influences such as team and task characteristics.