Business angels' ties with entrepreneurs in traditional and secular-rational societies: China, Egypt and Iran contrasted Germany and Norway

Abstract

Business angels fund entrepreneurs starting a business. The entrepreneurs may be family members, relatives, co-workers, friends or strangers. Funding occurs in a social context such as institutions and culture. Family is more important in traditional than in modern or secular-rational culture, where formal institutions and generalised trust are stronger, and expectedly promote investment in strangers. We examine funding in traditional societies, China, Egypt and Iran, and in secular-rational societies, Germany and Norway. A representative sample of 16,223 investors reported ties with entrepreneurs. Recipients of funds are found to be close family as often in secular-rational culture as in traditional culture, but recipients are extended family and friends more often in traditional than in secular-rational culture. Conversely, recipients are strangers more often in secular-rational culture than in traditional culture. These findings contribute to theorising about the socio-cultural context of funding for entrepreneurial enterprising.