How do Business Angels operate in impact investing?

Startups with a significant social impact can play a crucial role in contributing to societal transformation. However, to enhance their survival likelihood they need adequate financial resources and entrepreneurial support. Business angels are known to support entrepreneurs with these resource requirements. However, previous angel literature has mainly focused on ventures with high growth potential. Our study aims to understand if business angels who intentionally prioritise investments in startups with a significant social impact (Social Business Angels) have different investment behaviours. Two sources of data are used to examine this issue; a survey with 359 business angels operating in Italy and a follow up interview with 10 Social Business Angels. Our findings show that investment evaluation criteria and the investment process followed by Social Business Angels differ from those followed by their counterparts. This study contributes to the impact investment literature as well as the entrepreneurial finance literature.