Nascent Entrepreneurs' Business Proposals Qualities And Their Relationship To Financial Indicators When Applying For Angel Investment

Purpose: In our paper we investigate angels investors' decision outcomes about selection processes when evaluating business proposals. Specifically, we examined the relationship between previous entrepreneurial performance measured by financial indicators and: a) ability to write sound business proposal, b) acceptance by group of business angels investors.Design/methodology/approach: 322 nascent entrepreneurs asked Slovak Business Angels Network for investment by sending their business proposals, 102 of them already had past financial performance. By correlation design we tested if the quality of the business proposal (measured by Canvas business model and human capital) is in the relationship with specific financial indicators (profit, sales, ROA, liabilities to assets, growth indicators) and acceptance.Findings: Entrepreneurial competence and professionalism measured by previous financial performance such as sales, profit, debt, liabilities of assets were not related with the quality of the business model (measured by Canvas total score) described in the business proposal. Gatekeeper's decision to accept or reject a business proposal in the first round of evaluation was also not related to financial performance indicators.Research/practical implications: Gatekeeper, his team and investors should change their decision process. Entrepreneurial competence in generating positive requested financial indicators is different from competence in writing and describing sound business proposal.Originality/value: Entrepreneurial performance and competence measured by summary financial indicators does not leads to the ability to write a high-quality business proposal with well-crafted business model. Investors' decision process is suboptimal in the first round.