The Use and Content of Formal Rating Systems in Angel Group Investment Initial Screening Stages

  • Craig S. Galbraith University of North Carolina Wilmington
  • Alex F. DeNoble San Diego State University
  • Sanford B. Ehrlich San Diego State University


We examined the formal screening process of thirty-eight Angel Investment Groups. Within our sample, over eighty percent of the Angel Investment Groups used a committee of members to perform the initial screening of submitted business plans, while the remaining relied upon the managing partner or senior director to perform the initial screening. Of the Angel Investment Groups that use a screening committee, approximately half also employed a formal scoring system. With respect to the important dimensions used in the scoring systems, the quality/experience of the management team and the competitive advantage of the firm's product or service, including strength of intellectual property protection, were consistently the most common dimensions seen in the scoring systems examined. A content analysis of the scoring sheets was also performed in order to determine the various sub-topics and linguistic themes associated with Angel rating systems.


Download data is not yet available.


Angel Capital Association. (2002). Business angel investing groups growing in North America, working paper, ACA.

Ajamian, G., & Koen, P.A. (2002). Technology stage gate: A structured process for managing high risk, new technology projects, In P. Belliveau, A. Griffin, and S. Sorermeyer. (Eds.), PDMA Toolbook for New Product Development. New York: John Wiley & Sons, 267-295.

Astebro, T. (2004). Key success factors for technological entrepreneurs' R&D projects. IEEE Transactions on Engineering Management, 51(3), 314-321.

Baum, J., & Silverman, B., (2004). Picking winners or making them? Alliances, patents and human capital as selection criteria in venture financing and performance of biotechnology startups. Journal of Business Venturing, 19, 411-436.

Benjamin, G.A., & Margulis, J. (2000). Angel Financing: How to Find and Invest in Private Equity. New York: John Wiley & Sons.

Christina, C., Cornet, A. & Asandei, S. (2006). Financing of women-owned ventures: The impact of gender and other owner -and firm-related variables Venture Capital: An International Journal of Entrepreneurial Finance, 8(2), 133-157.

Cooper, R. (2001). Winning at New Products (3rd ed.). Reading, MA: Perseus Publishing.

Cooper, R., Edgett, S., & Kleinschmidt, E. (2002). Optimizing the stage-gate process: What best practice companies are doing - Part I. Research-Technology Management, 45(5), 21-27.

Diaz De Leo, E. (2003). Using repertory grid to identify intangibles in business plans. Venture Capital: An International Journal of Entrepreneurial Finance, 5(2), 135-160.

Fan, D. (1988). Predictions of public opinion from the mass media: Computer content analysis & math modeling. Westport, CT: Greenwood Press.

Fan, D. (2003) Relationship between Survey Questions, Newsgroup Content, and Mainstream News Coverage. Paper presented to the American Association for Public Opinion Research, Nashville, TN, August 6, 2003.

Galbraith, C., DeNoble, A., Ehrlich, S., & Kline, D. (2007). Can Experts Really Assess Future Technology Success? A Neural Network & Bayesian Analysis of Early Stage Technology Proposals. Journal of High Technology Management Research, 17, 125-137.

Galbraith, C., Ehrlich, S., & DeNoble, A. (2006). Predicting Technology Success: Identifying Key Predictors and Assessing Expert Evaluation for Advanced Technologies. Journal of Technology Transfer, 32(1), 673-684.

Gibbs, J. (2004). Media content analysis: An introduction to methodologies and applications. Journal of Social Affairs, 21 (82) 39-70

Heslop, L., McGregor, E., & Griffith, M. (2001). Development of a technology readiness assessment measure: The cloverleaf model of technology transfer. Journal of Technology Transfer, 26, 369- 384.

Inkelas, M., Loux, L., Bourque, L., Widawski, M., & Nguyen, L. (2000). Dimensionality and reliability of the Civilian Mississippi Scale for PTSD in a postearthquake community. Journal of Traumatic Stress, 13(1), 149-167.

Koen, P., Ajamian, G., Boyce, S., Clamen, A., Fisher, E., Fountoulakis, S., Johnson A., Puri, P., & Seibert, R. (2002). Fuzzyfront end: Effective methods, tools and techniques. In P. Belliveau, A. Griffin, and S. Sorermeyer. (Eds.). PDMA Toolbook for new product development. New York: John Wiley and Sons, 2-35.

Kollmann, T., & Kuckertz, A. (2004). Venture capital decision making after the high tech downturn - Considerations based on German e-business investment cases. Available at SSRN:

Krippendorff, K. (2004). Content Analysis: An Introduction to Its Methodology. 2nd edition, Thousand Oaks, CA: Sage.

Kullback, S. (1968). Information Theory and Statistics. New York: Dover Publications

Kvalseth, T. (1989). Note on Cohen's kappa. Psychological reports, 65, 223-226

Linton, J., Walsh, S., & Morabito, J. (2002). Analysis, ranking and selection of R&D projects in a portfolio. R&D Management, 32(32), 139-148.

Massachusetts Institute of Technology (MIT), (2000). Venture support systems project: Angel investors, Boston, MA: MIT Press.

MacMillan, I.C., Seigel, R., & SubbaNarasimha, P. (1985). Criteria used by venture capitalist to evaluate new venture proposals. Journal of Business Venturing, 1, 119.128.

MacMillan, I.C., Zemann, L., & SubbaNarasimha, P. (1987). Criteria distinguishing unsuccessful ventures in the venture screening process. Journal of Business Venturing, 2, 123.137

Mock, J., Kenkeremath, D., & Janis, F. (1993). Moving R&D to the marketplace: A guidebook for technology transfer managers, Falls Church, VA: Technology Prospects, Inc.

Montgomery, A., Panagopoulou, E., Peeters, M., & Schaufeli, W. (2005). The meaning of work and home. Community, Work & Family, 8 (2), 141- 161.

Neuendorf, K. (2002). The content analysis guidebook. Thousand Oaks, CA: Sage.

Ozer, M. (1999). A survey of new product evaluation models. Journal of Product Innovation Management, 16, 77- 94.

Payne, W., & McCarty, M. (2002). The anatomy of an angel investing network: Tech Coast Angels, Venture Capital, 4(4), 331-336.

Shane, S. (2007). Angel Groups: An Examination of the Angel Capital Association Survey.

Shepard, D., & Zacharakis, A. (2002). VCs decision processes: Evidence suggesting more experience may not always be better. Journal of Business Venturing, 18, 381-401.

Silva, J. (2004). Venture capitalists' decision-making in small equity markets: a case study using participant observation. Venture Capital: An International Journal of Entrepreneurial Finance 6(2), 125-145.

Smart, G. (1999). Management assessment methods in venture capital: an empirical analysis of human capital valuation. Venture Capital: An International Journal of Entrepreneurial Finance, 1(1), 59-82.

Sohl, J. (2005). The Angel Investor Market 2004: The Angel Market Sustains the Modest Recovery. University of New Hampshire.

Stemler, S. (2001). An overview of content analysis. Practical Assessment, Research & Evaluation, 7(17). Retrieved January 19, 2009 from Stemler, S. (2001).

Stone, P., Dunphy, D., Smith, M., & Ogilvie, D. (1966). The General Inquirer: A Computer Approach to Content Analysis. Cambridge, MA: The MIT Press

Sudek, R. (/2006/2007). Angel investment criteria. Journal of Small Business Strategy. 17(2), 89-103.

Sudek, R. (2009). The impact of entrepreneur personality, business attributes, and perceived trustworthiness on the Angel investment process. Paper presented at the 2009 USASBE Conference, Anaheim, CA.

Tech Coast Angels (2009). Webpage, accessed January 2, 2009 at

Tyebjee, T., & Bruno, A. (1984). A model of venture capitalist investment activity. Management Science, 30, 1051.1056.

Van Osnabrugge, M., & Robinson, R. (2000). Angel Investing: Matching Startup Funds with Start-up Companies: The Guide for Entrepreneurs, Individual Investors, and Venture Capitalists. San Francisco: Jossey-Bass.

White, R., Hertz, G. & D. Souza, R. (2009). Modeling the early screening state of private equity decisions, paper presented at the 2009 USASBE Conference, Anaheim, CA.

Wiltbank, R. (2005). Investment practices and outcomes of informal venture investors. Venture Capital, 7(4), 343-357

Wiltbank, R., & Boeker, W. (2007). Returns to Angel Investors in Groups, Report for the Angel Capital Assoc., available at

Wong, (2002). Angel financing, working paper, accessed September 1, 2008 at

Zacharakis, A., & Meyers, G. (2000). The Potential for actuarial decision models: Can they improve the venture capital investment decision? Journal of Business Venturing, 15, 323-346.

Zacharakis, A., & Shepard, D. (2001). The nature of information and overconfidence on venture capitalists' Decision making. Journal of Business Venturing, 16, 311-332.
How to Cite
GALBRAITH, Craig S.; DENOBLE, Alex F.; EHRLICH, Sanford B.. The Use and Content of Formal Rating Systems in Angel Group Investment Initial Screening Stages. Journal of Small Business Strategy, [S.l.], v. 20, n. 2, p. 61-79, may 2009. ISSN 2380-1751. Available at: <>. Date accessed: 22 apr. 2019.