Date of Award

2026-05-22

Degree Name

PhD Leadership Studies

Dissertation Committee

Fred J. Galloway, EdD, Chair Antonio Jiménez-Luque, PhD, Member David M. Hubinger, PhD, Member

Keywords

venture capital, angel investing, decision-making, venture investing

Abstract

The purpose of this dissertation is to examine how venture capitalists (VCs) and angel investors (AIs) make investment decisions regarding early-stage startups. Using an Interpretative Phenomenological Analysis (IPA) framework—consisting of three core components: phenomenology, hermeneutics, and idiography—this study draws upon three decision-making models: the Rational Actor Model (RAM), the Heuristics and Biases model (H&B), and the Naturalistic Decision-Making model (NDM) to explore what motivates VCs and AIs to choose, for instance, “Company A over Company B.” Semi-structured interviews were conducted with 10 experienced venture investors to examine how they evaluate risk, assess founders and teams, and navigate the persistent uncertainty inherent in early-stage investing. By identifying and synthesizing key influencing factors, the findings may provide actionable insights for startup founders seeking funding. Additionally, a deeper understanding of how VCs and AIs make investment decisions may help these investor communities reflect on their own decision-making processes and share best practices across their respective networks.

To capture the most current and practical perspectives, grey literature was incorporated alongside traditional peer-reviewed sources, and a subjectively iterative search approach enabled the review to curate relevant resources aligned with the IPA framework. The findings indicate that, among a wide range of influencing factors, the founding startup team is consistently viewed as the most critical determinant in investment decisions, with founder competence, consistency, and character serving as primary mechanisms through which uncertainty is interpreted and managed. Across participants, decision-making was shown to involve the integration of analytic reasoning, heuristics, and experience-based judgment rather than reliance on a single decision framework. Structural differences between investor types further influenced these processes: AIs, who typically operate independently and commit personal capital, relied heavily on relational judgment and trust formation when evaluating founders, whereas VCs often mitigated uncertainty through collaborative evaluation processes that distribute judgment across partners and external networks. This collective sensemaking enables VCs to develop shared confidence in high-stakes decisions where complete information is unavailable. Taken together, these findings highlight the complexity of early-stage investment decisions and contribute to a deeper understanding of how expert decision-makers interpret and act under conditions of persistent and irreducible uncertainty.

Document Type

Dissertation: Open Access

Department

Leadership Studies

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