Degree Name

EdD (Doctor of Education)


Educational Leadership

Date of Award


Committee Chair or Co-Chairs

Hal Knight

Committee Members

Andrew Czuchry, William Flora, James Lampley


Entrepreneurs perceive and manage risk differently than investors (Palich & Bagby, 1995). As a result, entrepreneurs may underestimate the extent to which their ventures are perceived to be risky by a potential investor. Consequently, the entrepreneur is left with making assumptions that could be detrimental in obtaining the necessary capital to launch and grow the business. The purpose of this study was to determine if there is a common set of perceived critical risk factors among a group of experienced investors that would cause them to reject a deal out of hand.

The research methodology chosen for this study was the Delphi Technique, which consisted of three rounds of surveys with a group of 18 experienced Angel Investors and Venture Capitalists. The process identified 82 critical risk factors across 7 categories. Over half of these factors were rated between ‘Important’ and ‘Critically Important’ at a consensus rate of greater then 70%. Each participant reported an average of 11 critical risk factors, yet they rated more than 40 as ‘Important’ or ‘Critically Important’, suggesting there are conscious and subconscious factors involved in the decision process. Subjective factors such as relationship were rated with higher importance than more objective measurable factors such as revenue or market share. Venture Capitalists, as a group, had higher rates of consensus than the Angel Investors and there were distinct differences between each group regarding which factors are most important.

The study is significant because it rated subjective based factors along with objective factors showing that investors tend to place more importance on trust and relationship building in the early stages of the investment process. The study also provided a framework for understanding the complexity of investment decision-making for the benefit of investors, entrepreneurs, and those who educate and mentor entrepreneurs. Finally, the study is significant for helping entrepreneurs understand the differences in perspective between Angel Investors and Venture Capitalists.

Document Type

Dissertation - unrestricted


Copyright by the authors.