Homophily and peer influence in early-stage new venture informal investment

Fei Qin, Tomasz Mickiewicz, Saul Estrin

Research output: Contribution to journalArticlepeer-review

8 Citations (SciVal)


Abstract: Conceptualising early-stage new venture informal investors as co-entrepreneurs whose actions are socially embedded, we examine the role of social influence and how it interplays with entrepreneurial experience at the individual level leading to informal investment. We extend theories of social homophily and social influence to argue that informal investment decisions are influenced by shared experience and entrepreneurism in peer groups. We test our hypotheses with a multi-level model using first a large cross-country dataset and next in depth within a country. Our analysis reveals that both individual entrepreneurship experience and peer group-embedded experience significantly influence the likelihood that an individual becomes an early-stage investor. Furthermore, these social effects substitute for the lack of individual entrepreneurial experience.

Original languageEnglish
JournalSmall Business Economics
Early online date3 Aug 2021
Publication statusPublished - 31 Dec 2021


  • Angel investors
  • Entrepreneurial experience
  • Entrepreneurship capital
  • Global Entrepreneurship Monitor (GEM)
  • Informal investors
  • Peer influence
  • Social homophily

ASJC Scopus subject areas

  • General Business,Management and Accounting
  • Economics and Econometrics


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