The yin and yang in the angel market: Angel group gender diversity and investment performance

In this study, we examine when angel group gender diversity influences investment performance. We argue that angel group gender diversity is a double-edged sword for investment performance. Drawing on the job demands theory, we propose that this gender diversity effect is moderated by job characteristics that pose unique information-processing demands for angel groups: group structure (loosely vs. tightly structured), number of co-investors, and portfolio industry diversification. Using a longitudinal sample of 222 angel groups from 2010 to 2022, we find that angel group gender diversity is positively related to investment performance, and this effect is stronger when angel groups are loosely structured and have a large number of investors. Our study contributes to entrepreneurial financing research by being among the first to identify the contextual factors that shape the effectiveness of angel group gender diversity.