Trust in the investor relationship marketing of startups: a systematic literature review and research agenda

Abstract

An important task of entrepreneurs is the management of investor relations. Past literature has emphasized the role of trust for managing relationships and regulating their quality. However, the landscape of investors has changed due to digitalization, so that new players have joined and expanded the investor offer. Entrepreneurs also often enter into relationships with multiple investors, which can challenge investor relationship marketing. To provide an overview, we conduct a structured literature review on the entrepreneur’s relationship marketing with four key investors: venture capitalists (VCs), business angels (BAs), banks, and crowd funders. The paper improves the understanding of trust as a concept in the management of investor relations and identifies directions for future research. The results show that research has predominantly studied trust in the VC–entrepreneur relationship. Across different investors, the primary focus has been on factors that influence trust building, especially investor communication and entrepreneur–investor fit. Furthermore, the results show that trust has an influence on cooperation by strengthening the relationship and reducing risk.

Linking the trust of industrial entrepreneurs on elements of ecosystem with entrepreneurial success: Determining startup behavior as mediator and entrepreneurial strategy as moderator

“…Considering the importance of trust for entrepreneurial startups (Kaiser and Berger, 2021 ), the significance of trust on different elements of the entrepreneurial ecosystem seems apparent for best performance (Ren et al, 2016 ). The trust is considered as social capital influencing various behaviors and performance outcomes.…”

The Pitch: Some Face-to-Face Minutes to Build Trust

“…The notion of direct competition and informal exchange behind those types of investment pools impact the face-to-face trust-building. Kaiser and Berger (2021) discussed the differences between standard venture financing and crowdfunding; Bammens and Collewaert (2014) highlighted that angel investors evaluate portfolio performances differently than single cases. Therefore, we decided not to study the combination of multiple investors.…”

“…A behavioral approach of trust is focused on a cooperation scheme, based on the decision and cues expressed to cooperate (or not) by creating the conditions of reciprocity. Some behaviors are considered as less trustworthy than others, building, damaging, or violating trust (e.g., not responding clearly to a precise question, not answering or returning calls, and being imprecise are trust damaging behaviors; more details are given in Tables 2 and 3 and in the work of Kaiser and Berger (2021)). The investment decision is strongly impacted by trust-based behaviors developing interpersonal trust by reducing the risk perceived (Maxwell and Lévesque 2014).…”

Comparative Analysis of Factors Influencing Informal Investors of Spain and the United States

“…According to the report of the Spanish Association of Business Angels of 2019, it highlights that in Spain 45% of investors have less than 5 investments, that 91% of investors consider training In the literature there is evidence of the critical role of trust when managing the relationships between the entrepreneurs and the investors, as well as regulating the quality of those relations (Kaiser & Berger, 2021). Another interesting approach found in the literature is covering the equity crowdfunding characteristics, highlighting the factors affecting the investors' intentions to invest in the entrepreneurs' projects (Alharbey & Van Hemmen, 2021).…”