Does Love Money Affect Vocational Behavior? Empirical Evidence from Italian Entrepreneurs

Abstract

The present paper aims to investigate the relevance that love money -i.e. financial resources provided by family, friends, and fools -can have on vocational behavior, standing for personal goals that are occupational in nature. In particular, the relationship between the above-cited financial resources and "core goals" (i.e. the survival of entrepreneurial firms) is tested by leveraging on second-hand data about Italian entrepreneurs retrieved from Global Entrepreneurship Monitor -GEM website and referring to the years 2012-2014 and by applying estimated Logit models.Achieved results show that financial resources provided by fools do not affect the survival of entrepreneurial firms. On the contrary, financial resources provided by family and friends do it. Noticeably, the impact of financial resources provided by family or by friends varies in terms of intensity and according to entrepreneurial profiles, in particular to gender and age. After highlighting the main limitations of this paper, some hints for further research are proposed in the last part of the paper.

The effect of formal financial accessibility on love money investment

“…Entrepreneurial finance literature defines “love money” investment as the capital provided by family, friends and others in a social circle to an entrepreneur to fund a business venture (Bygrave et al , 2003; Maula et al , 2005; Mason, 2006; Matricano and Sorrentino, 2019; Bosma et al , 2021). This form of informal investment represents the second most important funding source for early-stage ventures, following only entrepreneurial self-funding (Bygrave and Hunt, 2007; Daniels et al , 2016; Romaní et al , 2009).…”