How do different investors utilize digital resources to determine which new firms they should invest in? To address this question, we utilize a database of almost 20,000 entrepreneurs to investigate the different approaches to digital media used by venture capitalists (VCs) and angel investors when determining which ventures to invest in. While angel investors and venture capitalists look for certain commonalities (e.g., patents, higher levels of innovation), their utilization of digital media differs. Specifically, we find that for angel investors, the importance of firm innovativeness can be exacerbated by a strong social media and online presence. In contrast, venture capitalists were more reliant on data sources more directly tied to entrepreneurial activity, such as adherence to impact standards.
