When do angel investors invest in a diversified portfolio of industries? Drawing on angel investing and temporal research, we examine the effect of angels’ long-term orientations on the industry diversification of their venture portfolios. We argue that long-term oriented angels prefer less diversified industry portfolios. Moreover, when diversifying into unfamiliar industries, they will opt for capital-intensive industries requiring more patient effort. In contrast, short-term oriented angels have more diversified industry portfolios and favor deals in dynamic and “hot” or “trending” industries providing faster returns. Based on a longitudinal analysis of 133 angels from 2010 to 2019, our hypotheses were largely supported. Our study establishes angels’ temporal orientation as a critical antecedent of portfolio industry diversification strategy.
Keywords: angel investors; temporality; long-term orientation; portfolio diversification
