Trust, defined as a situation in which one individual willingly bestows resources upon another without a legally binding commitment and in anticipation of a gain (Coleman, 1990), plays an essential role in the decision to invest in entrepreneurial ventures (Amit et al., 1990; Gompers, 1995; Cable and Shane, 1997; Liao and Welch, 2005; Welter and Smallbone, 2006; Caliendo et al., 2012). It saves monitoring costs and the need for controls, thus reducing the possibility of conflicts and increasing the likelihood of a mutually beneficial exchange (Zacharakis, 2001; Zahra et al., 2006; Welter, 2006). However, trust between investors and entrepreneurs is difficult to build in the absence of track records of trustworthiness (Gompers, 1995; Howorth and Moro, 2006; Bottazzi, 2016) and, as is well-known, the presence of asymmetric information may lead to market failure (Akerlof 1970).
Trust is a complex and multidimensional phenomenon (McKnight et al., 1998; Welter, 2012). At the micro level, personal trust is based on the expectation of others’ trustworthiness, which in turn depends on the trustor’s disposition to trust, past experiences, emotions, and the cognitive processing of information such as signals (McKnight et al., 1998; Mayer et al., 1995; Nooteboom, 2002; Welter and Smallbone, 2006; Huang and Knight, 2017; Pollack et al., 2017; Saadaoui, 2022). At the meso level, trust takes the form of collective trust, based on recommendations, reputation and shared values derived from membership in social groups such as communities, organizations and social networks (McKnigh…