Is it a match? - The role of social identities in business angel decision making and the investor-founder relationship

In an inductive study, we examine the identities of business angels to understand their commitment to financially risky relationships, characterized by negative internal rate of returns. Our research identifies four hybrid identities, each exhibiting a gradual expression of profit-seeking motives. We continue to investigate how these hybrid identities align with the social identities of entrepreneurs. Through our analyses, we uncover the importance of these identity matches in explaining investor persistence or disengagement within entering and ongoing investment relationships. To consolidate our findings, we propose an "identity click" model that illustrates the occurrence and dynamic nature of interactions between resource providers and resource seekers in the field of entrepreneurship. This model highlights the crucial role played by different combinations of hybrid identities instead of singular identities.