A new survey suggests wealthy angel investors are not taking as close a look as they should into some of their investments.
Research by Massey University management master’s student Hattaf Ansari shows that only 75 per cent of the 88 active investors surveyed had done their own due diligence for all their previous investments.
That left a quarter who did not, suggesting that they had invested in ventures before by relying primarily on others’ opinion – or doing no due diligence.
And that’s active investors, not the large swathe of “passive” angels keeping an eye on the industry.
Ansari said the survey also indicated that Kiwi investors were cautious and liked a second opinion.
Only 46 per cent relied on their own abilities, when asked who they preferred to rely on for conducting due diligence.
Ansari said the implication was that Kiwi investors frequently invested in ventures they did not have “adequate knowledge or expertise in” and hence relied on others to confirm their decision.
“It is a way for them to minimise the risk of investing in ventures they do not have experience in. ”