Entrepreneurs Should Emphasize Expertise Over Enthusiasm

Funding pitches work better when emotions don’t come into play

Entrepreneurs Should Emphasize Expertise Over Enthusiasm

Pitch Breakdown

Although research conventionally suggests that enthusiastic entrepreneurs engage investors, in interviews investors said they often see emotional pitches as impression management, or trying to create a positive impression on an audience.

“When people feel your behaviors are triggered by impression management motives, they feel you are not reputable and what you’re proposing isn’t rigorous,” Liu said. “So, they really doubt the value of your presentation.”

To test if this was the general opinion of investors, the researchers surveyed 1,811 potential investors looking at a random sample of 182 videos on the popular crowdfunding website, Kickstarter. The site is an ideal testbed because most participants don’t know each other, making the pitch video their main interaction. About 10 participants viewed each video.

Dong Liu

The researchers eliminated bias by running a second study with 273 random participants and hired an actor to give the same pitch with and without enthusiasm (as determined by facial expression, body language, tone of voice, and vocal pitch). Before watching the video, the researchers offered participants different background information on the entrepreneur, either indicating they had a lot of experience or none in the area they were pitching.

Participants in both studies were asked if they would fund it or buy the advertised product using a seven-point Likert scale from “very unlikely” to “very likely.” Finally, they were asked about their general impressions of the entrepreneurs’ enthusiasm, expertise, and their projects using a similar Likert scale.

Pitch Perfect

The findings showed that enthusiasm is a double-edged sword. Strong emotions can appear manipulative when an entrepreneur seems inexperienced.

“Funders are more likely to be positively influenced by entrepreneurs’ enthusiasm when they saw those entrepreneurs are actually very capable of completing the project and have a strong expertise in the field,” Liu said.

The researchers believe these findings also could apply to job interviews and plan to study that next. For now, Liu shares the research with his students.

“It’s definitely good to show enthusiasm, but don’t forget, at the beginning of their presentation, they need to show their expertise,” he said. “Otherwise, their passion and excitement about the job may even backfire.

This article was originally published in the Mortgage Banker Magazine February 2023 issue.
Published on
Feb 02, 2023
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