Abstract
We explore whether business angels shift strategies within single investments in order to overcome relationship risks associated with investing in young private ventures. And, if so, what triggers such shifts. Primary data were collected from 32 interviews with four matched business angel-entrepreneur dyads. Extensive iterative theory and cross-case comparisons reveal that risk mitigation strategies consist of a mix of various degrees of direct, indirect and trust- based control mechanisms, which change over time within investments due to context-specific triggers. Two triggers emerging particularly strong from the data were (i) a shift of the angel's perception of the entrepreneur's ability, and (ii) the entrance of new investors. We theorize on these findings and derive seven novel propositions.