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Pitch envisaging: The role of narrative transportation in pitching success
Abstract
How are entrepreneurs able to optimize their ability to persuade angel investors to commit resources? Narrative transportation theory suggests that familiar elements of a story can change an audience's perceptions of, and attitudes about, the opportunity by influencing their cognition. When experiencing the effects of narrative transportation, individuals are “transported” into the story and begin to accept the narrative world as created by the story in lieu of personal knowledge, experiences, or real-world facts. In an entrepreneurship context, we posit that if investors are narratively transported through a familiar pitch narrative, they may envisage a favorable outcome of what is pitched and adapt the opportunity in their minds with the result of, ultimately, committing resources. The findings from our study of investors who watched and reported on multiple pitches suggest that cognitive processes induced by narrative transportation explain the relationship between familiarity and entrepreneurial opportunity adaptation, which—in turn—increase the likelihood of angels' resource commitment. The key insight of our study reveals that when the investors are mentally transported into the story contained within a pitch narrative, they will be more likely to adapt the opportunity and more likely to commit their resources.
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Previous research in the domain of attitude change has described 2 primary dimensions of thinking that impact persuasion processes and outcomes: the extent (amount) of thinking and the direction (valence) of issue-relevant thought. The authors examined the possibility that another, more meta-cognitive aspect of thinking is also important - the degree of confidence people have in their own thoughts. Four studies test the notion that thought confidence affects the extent of persuasion. When positive thoughts dominate in response to a message, increasing confidence in those thoughts increases persuasion, but when negative thoughts dominate, increasing confidence decreases persuasion. In addition, using self-reported and manipulated thought confidence in separate studies, the authors provide evidence that the magnitude of the attitude-thought relationship depends on the confidence people have in their thoughts. Finally, the authors also show that these self-validation effects are most likely in situations that foster high amounts of information processing activity.
Crowdfunding is a rapidly growing phenomenon wherein entrepreneurs seek funding for their entrepreneurial activities from a potentially large audience of interested individuals. Crowdfunding has exploded in popularity over the last decade and now accounts for tens of billions of dollars annually. But despite the importance and growth of crowdfunding, little scholarly knowledge exists about the topic. To address this gap, this special issue includes five articles that each advance knowledge about crowdfunding in important ways. We briefly review past work on crowdfunding in leading entrepreneurship and management journals. We then highlight the diverse contributions offered in the special issue articles.
Studies of innovative behavior (the generation, dissemination, and implementation of new ideas) have generally overlooked the agency perspective on this important type of performance behavior. Guided by social-cognitive theory, we propose a moderated mediation relationship to explain why and how employees become motivated to make things happen through their innovative endeavors. First, we propose that within-individual increases in organizational trust and perceived respect by colleagues promote within-individual increases in creative, persuasion, and change self-efficacy over time. Second, we propose that within-individual increases in self-efficacy beliefs promote within-individual increases in idea generation, dissemination, and implementation over time. Finally, we propose that psychological collectivism (a between-individual variable) is a moderator, and that a higher level of psychological collectivism weakens the positive relationship between within-individual increases in self-efficacy beliefs and within-individual increases in innovative behavior. Repeated measures collected from 267 employees in Italy at 3 time points over an 8-month period generally support our proposed dynamic moderated mediation relationship. (PsycINFO Database Record
(c) 2015 APA, all rights reserved).
Prior research highlights storytelling as a means for entrepreneurs to establish venture legitimacy and gain stakeholder support. We extend this line of research by examining the role that projective stories play in setting expectations and the dynamics that ensue. Such attention highlights a paradox-the very expectations that are set through projective stories to gain venture legitimacy can also serve as the source of future disappointments. Because of inherent uncertainties that projective stories mask, ventures will likely deviate from their early projections, thereby disappointing stakeholders. This, in turn, can result in a loss of legitimacy. Recognizing that entrepreneurship is an ongoing process, we examine the constraints and possibilities of maintaining or regaining legitimacy through revised storytelling. We conclude the paper with implications for research on entrepreneurial storytelling as an ongoing process.
By considering the amount of uncertainty perceived and the willingness to bear uncertainty concomitantly, we provide a more complete conceptual model of entre- preneurial action that allows for examination of entrepreneurial action at the indi- vidual level of analysis while remaining consistent with a rich legacy of system-level theories of the entrepreneur. Our model not only exposes limitations of existing theories of entrepreneurial action but also contributes to a deeper understanding of important conceptual issues, such as the nature of opportunity and the potential for philosophical reconciliation among entrepreneurship scholars.
Business angels have been highlighted as important stakeholders for potential high-growth ventures. Extant empirical research provides evidence that they not only contribute with money but also bring added value to the ventures in which they have invested. However, despite the reported benefits of the value added provided by these investors there are very few studies that try to conceptualize this important issue. The present study seeks to meet this shortcoming by presenting a review of literature and research on business angels and value added. The overall objective is to recognize the range of value added activities that business angels have been reported to perform, aggregate the findings into a set of distinct but complementary value adding roles, and then link these roles to theoretical perspectives that explain why they have the potential to contribute to added value. Four different value added roles performed by informal investors are presented together with an explanation of how they can be seen as complementary to each other. The following discussion is then used to guide future studies of business angels and value added towards areas where our knowledge is still limited.
Boundaries are a defining characteristic of organizations, and boundary
roles are the link between the environment and the organization.
The creation, elaboration, and functions of boundary spanning roles
are examined, with attention to environmental and technological
sources of variation in the structure of boundary roles. Eleven hypotheses
integrate the material reviewed and are amenable to empirical
test. Future research should overcome problems created when organizations
are treated as "wholes" or single entities.
This research addresses the question of what specific entrepreneurs' behavior increases the propensity for resource acquisition. Within the context of business "pitches," we explore subtleties in the process via a theoretically derived model linking entrepreneurs' prepared-ness behavior, perceived cognitive legitimacy, and amount of funding received. We test this model using data coded from two sources: 14 episodes of the television show "Shark Tank" that aired in 2009, as well as 84 episodes of "Dragons Den" that aired from 2005 to 2010. Within these episodes, we specifically examine the 113 individual business pitches that received funding. Overall, results suggest the relationship between entrepreneurs' prepared-ness behavior and the amount of funding received is mediated by cognitive legitimacy. Specifically, entrepreneurs' increased preparedness behavior was positively related to increased cognitive legitimacy. Cognitive legitimacy, in turn, was positively related to amount of funding received. We offer thoughts regarding implications from both theoreti-cal and practical perspectives.
The process of identifying, shaping, and pursuing market opportunities is emerging as a focal point in the field of entrepreneurship. Scholarly efforts to date have considered what happens during this process; it is time to turn attention to how and why. This article examines one such “how” question: how do entrepreneurs think and reason such that they identify innovative opportunities? Specifically, the cognitive processes of mental simulation and counterfactual thinking are proposed as mechanisms by which entrepreneurs identify and develop innovative opportunities. Propositions regarding the application of these cognitive processes to opportunity identification are presented and discussed.
Financing is a critical issue for the survival and development of small and medium-sized enterprises. Business angels play a key role in financing these enterprises, especially innovative ones with high growth potential. Business angels fill the gap between founders, family, and friends on one side, and institutional venture capital funds on the other side, as a financing source. Business angels invest a large amount of money in seed, start-up, and early-stage enterprises.
Business angels are important for small and medium-sized enterprises because they provide more than money. They are hands-on investors and contribute their skills, expertise, knowledge, and contacts in the businesses they invest in. They are wealthy persons with great business experience, willing to invest and offer their wealth and knowledge to owners and to entrepreneurs to start or develop their businesses.
Business angels like to remain anonymous, so many ideas cannot be implemented. To address this issue, many countries establish business angel syndicates and networks to facilitate the process of matching entrepreneurs and business angels.
Copyright
For older and newer firms, larger and smaller, there are strengths and weaknesses related to firm age and size. What may be a strength for one type is often a weakness for another. This analysis brings together the theoretical frameworks of population and organizational ecology and strategic management to examine the liabilities of firm age and size, and strategies each type of firm may use to overcome potential liabilities. The theoretical perspectives each focus on change, but at different levels of analysis – this study seeks to include both population and organizational change. It examines characteristics of older, larger firms and newer, smaller organizations that make change difficult or that cause the firm to face a volatile environment. Strategic implications of the liabilities of age and size are discussed. For smaller firms, for example, partnerships with other organizations can provide access to resources (and stability); for larger firms, partnerships can provide access to new technologies (and revitalization).
We define cultural entrepreneurship as the process of storytelling that mediates between extant stocks of entrepreneurial resources and subsequent capital acquisition and wealth creation. We propose a framework that focuses on how entrepreneurial stories facilitate the crafting of a new venture identity that serves as a touchstone upon which legitimacy may be conferred by investors, competitors, and consumers, opening up access to new capital and market opportunities. Stories help create competitive advantage for entrepreneurs through focal content shaped by two key forms of entrepreneurial capital: firm-specific resource capital and industry-level institutional capital. We illustrate our ideas with anecdotal entrepreneurial stories that range from contemporary high-technology accounts to the evolution of the mutual fund industry. Propositions are offered to guide future empirical research based on our framework. Theoretically, we aim to extend recent efforts to synthesize strategic and institutional perspectives by incorporating insights from contemporary approaches to culture and organizational identity. Copyright © 2001 John Wiley & Sons, Ltd.
Using 150 interactions between entrepreneurs and potential investors, we study early stage business angel decision making. We show that contrary to the majority of past research that suggests they should, angel investors do not use a fully compensatory decision model wherein they weight and score a large number of attributes. Rather, they use a shortcut decision making heuristic known as elimination-by-aspects to reduce the available investment opportunities to a more manageable size. If an opportunity is diagnosed with a fatal flaw, it is rejected in the first stage of the decision making process, but all opportunities with no fatal flaws do progress beyond that stage.
This chapter extends and elaborates the individual-opportunity nexus framework on entrepreneurship. First, the chapter discusses
in detail the existence of entrepreneurial opportunities, and the processes of opportunity discovery and exploitation. Second,
the chapter describes several typologies of opportunities. Third, the chapter discusses the importance of the locus of opportunity
discovery and exploitation.
This study examined the narrative effects of familiarity, transportation, whether a story is factual or fiction, and perceived realism on the stigmatizing behavior of social distancing behavior. A sample of N = 137 participants watched a commercial movie about mental illness. Genre was manipulated to determine whether fiction or nonfiction impacted social distancing behavior. Although there was no effect of the genre manipulation, transportation was found to have a relationship with social distancing, with the more relevant the participants found the story, the lower they demonstrated social distancing behavior. How much participants identified with the main character was found to have a partial mediating effect between perceived story relevance and social distancing behavior.
Transportation was proposed as a mechanism whereby narratives can affect beliefs. Defined as absorption into a story, transportation entails imagery, affect, and attentional focus. A transportation scale was developed and validated. Experiment 1 (N = 97) demonstrated that extent of transportation augmented story-consistent beliefs and favorable evaluations of protagonists. Experiment 2 (N = 69) showed that highly transported readers found fewer false notes in a story than less-transported readers. Experiments 3 (N = 274) and 4 (N = 258) again replicated the effects of transportation on beliefs and evaluations; in the latter study, transportation was directly manipulated by using processing instructions. Reduced transportation led to reduced story-consistent beliefs and evaluations. The studies also showed that transportation and corresponding beliefs were generally unaffected by labeling a story as fact or as fiction.
Recent research has demonstrated that when people resist persuasive attacks, they can under specifiable conditions become more certain of their initial attitudes. The present research explores the role of elaboration in determining when this effect will occur. Using both self-reported differences in situational elaboration (Study 1) and chronic individual differences in the need for cognition (Study 2), it is demonstrated that resisting persuasion increases attitude certainty primarily when elaboration is high. When elaboration is low, resisting persuasion does not appear to impact attitude certainty. These findings shed light on the role of metacognitive factors in resistance to persuasion, pinpointing the conditions under which these factors come into play.
Opportunity identification represents a unique entrepreneurial behavior yet its processes and dynamics remain mysterious. Entrepreneurial alertness, a distinctive set of perceptual and information-processing skills, has been advanced as the cognitive engine driving the opportunity identification process. To date, empirical support has been equivocal; however, these early studies suffer from fundamental mistakes in theory and method. These mistakes are examined and addressed. A research agenda for the systematic and conceptually sound study of entrepreneurial alertness and opportunity identification is outlined. Copyright 2001 by Kluwer Academic Publishers
Entrepreneurship scholars argue that effective storytelling is critical to the fundraising process, yet scholars rarely examine how the inclusion of core story elements in resource appeals such as characters, plot, or setting impacts fundraising effectiveness. Drawing from narrative theory and research on narrative analysis, we examine how the inclusion of fundamental story elements impacts fundraising in 359 crowdfunding campaigns. We leverage a fuzzy set qualitative comparative analysis to provide a holistic exploration of how story elements shape funding and reveal five storytelling configurations that yield superior funding performance. We then unpack the theoretical and practical implications of our findings to provide a deeper understanding of storytelling in resource acquisition.
Entrepreneurs regularly confront resource constraints as they attempt to bring their ideas to fruition. To overcome resource constraints, they often try to mobilize resources from external resource providers and use narratives as a critical tool to do so. We theorize that a particular type of narrative – a resourcefulness narrative – will significantly impact an entrepreneur's ability to mobilize support from resource providers. A resourcefulness narrative is a discursive, temporal account of past or ongoing entrepreneurial actions, whereby an entrepreneur is presented as using, assembling, or deploying resources in creative ways in order to overcome an impediment. We argue that a resourcefulness narrative generates positive emotional and cognitive reactions from external resource providers such that they are inclined to support a venture. Furthermore, these effects are contingent on the general level of resource scarcity or munificence in a venture's environment, the level of uncertainty underpinning the venture, the entrepreneur's experience, and the recency of the actions described within the narrative. By acting resourcefully and transforming that action into a narrative, entrepreneurs can resourcefully mobilize support.
Accredited investors finance more than 75,000 U.S. startups annually. We explain how training aspiring entrepreneurs to pitch their new business ideas to these investors affects their odds of continued funding discussions. We model accredited investors’ decision to continue investigation as a real option whose value is a function of their experience and the information contained in the entrepreneurs’ pitches. We derive four hypotheses from the model, which we test through a field experiment that randomly assigns pitch training at four elevator pitch competitions. The data support all four hypotheses and are inconsistent with alternative explanations.
The online appendix is available at https://doi.org/10.1287/mnsc.2017.2882 .
This paper was accepted by Ashish Arora, entrepreneurship and innovation.
We describe an actionable research approach for addressing current challenges to theoretical advancement labeled theory elaboration. Theory elaboration is the process of conceptualizing and executing empirical research using preexisting conceptual ideas or a preliminary model as a basis for developing new theoretical insights by contrasting, specifying, or structuring theoretical constructs and relations to account for and explain empirical observations. We identify and describe seven specific tactics for conducting a theory elaboration study: horizontal contrasting, vertical contrasting, new construct specification, construct splitting, structuring specific relations, structuring sequence relations, and structuring recursive relations. We also link each tactic with different types of theory advancements. In addition, we provide a sequential decision-making process for deciding whether to adopt a theory elaboration approach given a particular research domain and context. Finally, we identify research domains and specific topics in organizational behavior, human resource management, strategic management, and entrepreneurship for which theory elaboration is likely to be most effective as a means to make theoretical advancements.
Two decades of informative research has asserted that legitimacy attainment is essential to the survival and growth of emerging ventures, yet little empirical research has been conducted to either (a) validate the notion that emerging ventures transition from pre-legitimacy to legitimacy, or (b) identify when such a transition happens for the average new venture. Hence, the present research seeks to begin bridging this substantial gap by introducing and testing the notion that a financial legitimacy threshold (FLT) exists within emerging ventures. Using attainment of financing as a proxy for initial legitimacy, we test our hypothesis that an FLT exists on two large, independent data sets?the 1998 (N = 3,033) and 2003 (N = 3,751) Surveys of Small Business Finances. Results indicate that emerging ventures tend to finally transition to legitimacy and, thus, substantially shed external liabilities of newness at 12 years of age, six employees, and $379,000 in sales. Our findings that an FLT exists advance the literature by (a) suggesting that new venture legitimacy is a dichotomous variable that emerging firms either do or do not possess, and (b) articulating a point in size, age, and revenue that average emerging ventures must achieve before they are able to substantially neutralize external newness liabilities via legitimacy attainment.
We theorize about how the entrepreneurial identity, which we define as the constellation of claims around the founder, new venture, and market opportunity as to "who we are" and "what we do," serves as a touchstone for investor judgments about new venture plausibility. We propose that entrepreneurial identities are judged favorably when they are legitimately distinctive, and that such judgments are influenced by market context and are mediated by identity narratives that provide institutional primes and equivocal cues in investor sensemaking.
The impact of entertainment-education messages on beliefs, attitudes, and behavior is typically explained in terms of social cognitive theory principles. However , important additional insights regarding reasons why entertainment-education messages have effects can be derived from the processing of persuasive content in narrative messages. Elaboration likelihood approaches suggest that absorption in a narrative, and response to characters in a narrative, should enhance persuasive effects and suppress counterarguing if the implicit persuasive content is counterattitudinal. Also, persuasion mediators and moderators such as topic involvement should be reduced in importance. Evidence in support of these propositions are reviewed in this article. Research needed to extend application of these findings to entertainment-education contexts, to further develop theory in the area of persuasion and narrative, and to better account for other persuasive effects of entertainment narrative, such as those hypothesized in cultivation theory, are discussed.
Mental simulation has been defined as the cognitive construction of hypothetical scenarios, which are usually in the form of stories or narratives. The experiment in this paper examines the favorable effect of ad-encouraged mental simulation on ad attitudes and brand evaluations. A model is developed wherein mental simulation persuades via narrative transportation, defined as immersion into a story (Gerrig 1994; Green and Brock 2000). Transportation includes strong affective responses and low levels of critical thought, which, in turn, affect ad attitudes and brand evaluations.
"Transportation into a narrative world" (Green & Brock, 2000, 2002) has been identified as a mechanism of narrative impact. A transported individual is cognitively and emotionally involved in the story and may experience vivid mental images. In the study reported here, undergraduate participants (N = 152) read a narrative about a homosexual man attending his college fraternity reunion, rated their transportation into the story, rated the perceived realism of the story, and responded to statements describing story-relevant beliefs. Transportation was positively correlated with perceived realism. Furthermore, individuals with prior knowledge or experience relevant to the themes of the story (e.g., had homosexual friends or family members, were knowledgeable about American fraternities) showed greater transportation into the story. Highly transported readers showed more story-consistent beliefs, and the positive relationship between transportation and story-consistent beliefs held for those both with and without previous relevant experience.
This study adds new insights to the growing body of research showing that entrepreneurs' communication skills and personal attributes influence investor decision making. Twenty-four business angels attending a UK investor forum completed questionnaires evaluating 32 ‘presentational’ and ‘non-presentational’ aspects of three entrepreneurs' oral pitch presentations. The business angels' level of investor interest was significantly related to their evaluations of the quality and content of the entrepreneurs' presentations: the higher an entrepreneur's overall presentation score, the greater the likelihood that the business angels would be interested in pursuing that investment opportunity. Presentational factors (relating to the entrepreneurs' style of delivery, etc.) tended to have the highest influence on the overall score an entrepreneur received as well as on business angels' level of investment interest. However, the business angels appeared to be unaware of (or were reluctant to acknowledge) the influence presentational factors had on their investment-related decisions: the stated reasons for their post-presentation intentions were focused firmly on substance-oriented non-presentational criteria (company, market, product, funding/finance issues, etc.). More generally, comments about the entrepreneurs' presentations centred on presentational issues relating to clarity/understandability and structure, the level of information provided, the entrepreneurs' personal characteristics, and their ability to sell themselves and their investment opportunity.
Research indicates that the extent to which one becomes engaged, transported, or immersed in a narrative influences the narrative's potential to affect subsequent story-related attitudes and beliefs. Explaining narrative effects and understanding the mechanisms responsible depends on our ability to measure narrative engagement in a theoretically meaningful way. This article develops a scale for measuring narrative engagement that is based on a mental models approach to narrative processing. It distinguishes among four dimensions of experiential engagement in narratives: narrative understanding, attentional focus, emotional engagement, and narrative presence. The scale is developed and validated through exploratory and confirmatory factor analyses with data from viewers of feature film and television, in different viewing situations, and from two different countries. The scale's ability to predict enjoyment and story-consistent attitudes across different programs is presented. Implications for conceptualizing engagement with narratives as well as narrative persuasion and media effects are discussed.
Provides an intuitive introduction to the key elements of the authors' theory, the Transportation-Imagery Model, and presents the postulates and their implications. Next, this chapter compares the Transportation-Imagery approach to persuasion with dual-process models of rhetorical persuasion, specifically it contrasts the authors' theory with the Elaboration-Likelihood Model. Selected research implications are discussed. This chapter concludes with a discussion of possible areas in which the ideas of narrative persuasion can be applied. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
The impact of entertainment—education messages on beliefs, attitudes, and behavior is typically explained in terms of social cognitive theory principles. However, important additional insights regarding reasons why entertainment—education messages have effects can be derived from the processing of persuasive content in narrative messages. Elaboration likelihood approaches suggest that absorption in a narrative, and response to characters in a narrative, should enhance persuasive effects and suppress counterarguing if the implicit persuasive content is counterattitudinal. Also, persuasion mediators and moderators such as topic involvement should be reduced in importance. Evidence in support of these propositions are reviewed in this article. Research needed to extend application of these findings to entertainment—education contexts, to further develop theory in the area of persuasion and narrative, and to better account for other persuasive effects of entertainment narrative, such as those hypothesized in cultivation theory, are discussed.
Start-up businesses often need external financing to grow. These new ventures frequently turn to business angel investors for capital. Angels, who are often wealthy individuals, provide early stage financing, called seed capital, for these start-up ventures. This study examines what a group of angel investors in Southern California consider when reviewing an investment opportunity, and how they prioritize their investment criteria. The study utilizes a two-phase approach consisting of a qualitative first phase and a quantitative second phase. The results of this study show that trustworthiness of the entrepreneur, quality of the management team, enthusiasm of the lead entrepreneur, and exit opportunities for the angel are the angels' top criteria.
“Transportation into a narrative world” is an experience of cognitive, emotional, and imagery involvement in a narrative. Transportation theory (Green & Brock, 2000, 2002) provides a lens for understanding the concept of media enjoyment. The theory suggests that enjoyment can benefit from the experience of being immersed in a narrative world, as well as from the consequences of that immersion. Consequences implied by transportation theory include connections with characters and self-transformations.
The impact of pictures on narrative-and list-based impression formation: a process interference model
- Adaval
Perceived realism: dimensions and roles in narrative persuasion
- Cho
To invest or not to invest: understanding the entrepreneur-investor-venture (EIV) nexus
- Gianiodis
The business angel's investment decision
- Mason
The extended transportation-imagery model: a meta-analysis of the antecedents and consequences of consumers' narrative transportation
- Van Laer