Nascent Entrepreneurs' Business Proposals Qualities and Their Relationship to Financial Indicators when Applying for Angel Investment

In our paper we investigate angels investors' decision outcomes about selectionprocesses when evaluating business proposals. Specifically, we examined the relationshipbetween previous entrepreneurial performance measured by financial indicators and: a) abilityto write sound business proposal, b) acceptance by group of business angels investors. Design/methodology/approach: 322 nascent entrepreneurs asked Slovak Business AngelsNetwork for investment by sending their business proposals, 102 of them already had pastfinancial 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 specificfinancial indicators (profit, sales, ROA, liabilities to assets, growth indicators) and acceptance. Findings: Entrepreneurial competence and professionalism measured by previous financialperformance such as sales, profit, debt, liabilities of assets were not related with the quality ofthe 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 evaluationwas also not related to financial performance indicators. Research/practical implications: Gatekeeper, his team and investors should change theirdecision process. Entrepreneurial competence in generating positive requested financialindicators is different from competence in writing and describing sound business proposal. Originality/value: Entrepreneurial performance and competence measured by summaryfinancial indicators does not leads to the ability to write a high-quality business proposal withwell-crafted business model. Investors' decision process is suboptimal in the first round.