Exploring the Dynamics of Investor-Entrepreneur Relationships in Business Angel and Venture Capital Financing of Start-up Companies in Nigeria [A Combined Stewardship, Trust, and Agency (STA) Based Approach]

  • Ignatius Duhu

Student thesis: Doctoral ThesisDoctor of Philosophy


This doctoral thesis explores the dynamic and complex investment and ownership relationships between the investors (business angels/venture capitalists) and entrepreneurs in the financing of Nigerian start-up and scaleup enterprises to understand the reasons for low engagement between these investors and entrepreneurs. Building impactful, sustainable, scalable, and profitable entrepreneurial ventures in Nigeria requires an open, healthy, and progressive investor-entrepreneur relationship, which in turn requires maintaining cooperation and collaboration that are devoid of deception, exploitation, and opportunism. Therefore, the purpose of this PhD research is to explore the key factors that cause low engagement in this relationship and their link to stewardship, trust, and agency (control) for developing a more collaborative and cooperative investor-entrepreneur relationship in an agency environment in the developing countries’ context – with specific reference to Nigeria. A review of the literature covering various aspects of entrepreneurial finance and the investor entrepreneur relationship was conducted. This research work identifies equity (finance), enterprise, entrepreneur, and environment as the four conduits through which relationship flows. The study examines several issues on these conduits with regards to the investment logic, perceptions, and expectations of investors and entrepreneurs at both pre-and post-investment stages. The study adopts an in-depth, open-ended, semi-structured interview approach to investigate the investor-entrepreneur engagement. It uses study data collected from secondary sources as well as primary sources through interviews with business angels, venture capitalists, entrepreneurs, and their promoters. The data obtained were transcribed using Otter.ai and analysed using QDA Miner – a qualitative data analysis tool. The empirical evidence indicates that the investor-entrepreneur relationship at the early start-up and scale up stages suffers from multiple challenges. These challenges are related to the issues within these four aforementioned conduits – equity, entrepreneur, enterprise, and the environment through which relationship flows. Although investors and entrepreneurs make efforts to address these challenges to promote a cooperative and collaborative relationship, the problems of low engagement still remain. The findings can be utilized to enhance collaboration and cooperation in the investor-entrepreneur relationship by identifying the appropriate context to apply relational or control mechanisms, which would eventually lead to better performance of start-up ventures. The findings have many important practical implications for investors and the early-stage entrepreneurs in Nigeria seeking investment opportunities or already managing existing relationships. In addition to investors and entrepreneurs, the findings have some important theory and policy implications for academia and government respectively. This research work contributes to the body of literature within the field of entrepreneurial finance in developing countries and fills the existing gap in knowledge in the scholarly research into relationships between entrepreneurs and the traditional equity financiers – as business angels and venture capitalists. It also contributes to the literature by developing a new framework for the financing and ownership relationship mechanisms for a more efficient data-driven, digitally enabled investment relationship between entrepreneurs and their investors. This project makes Page 8 of 300 important contributions to the literature in the area of investor and entrepreneur relationship in start-up financing in the Nigerian and other developing countries’ entrepreneurial environments. This research leads to the development of an ownership framework that combines the triple mechanisms of stewardship, trust, and agency to design, develop and promote tradeable hybrid financing instruments for the digital economy. This new framework will help increase engagement between investors and entrepreneurs by reducing misunderstandings, disagreements, and conflicts between investors and entrepreneurs in the financing of start-up companies in Nigeria and across Africa.
Date of AwardJul 2022
Original languageEnglish
Awarding Institution
  • Coventry University
SupervisorVictor Atiase (Supervisor), Gideon Maas (Supervisor) & Arun P. C Sukumar (Supervisor)


  • entrepreneurship
  • agency theory
  • entrepreneurial finance
  • developing countries
  • trust
  • business angel
  • venture capital
  • stewardship
  • cooperation
  • collaboration

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