Are investors sensitive to the structure of business pitches?

London Business School
Bristol, England
Raised of $4,800 Goal
Ended on 9/24/17
Campaign Ended
  • $4
  • 1%
  • Finished
    on 9/24/17

About This Project

Entrepreneurship research says that investors such as VCs/angels are sensitive to the nature of information presented to in investor pitches - the more information, the higher is the chance of raising funds. Literature is relatively silent as regards if investors are sensitive to the "structure" of information i.e. ways in which data and arguments connect in investor pitches. Knowing this will add to our understanding of investor decision-making, venture finance & psychological biases.

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What is the context of this research?

Entrepreneurship & management research state that VCs/angel investors are sensitive to the nature of information presented in pitches - the more information, the higher is fundraising likelihood (Huang & Pearce, 2015). We need to know if investors exhibit sensitivity to ways in which arguments and data are connected in investor pitches. I look to understand if and why i) simple arguments are preferred to complexity, ii) decision-making is sensitive to the time available to make decisions, iii) experienced investors (VCs, angels) behave differently from lay investors. Knowing these could be a large addition to fundamental questions in entrepreneurship and decision-making theories and practice.

What is the significance of this project?

The proposed research project is poised to make several contributions to theory and practice in entrepreneurship and management. First, to the entrepreneurial finance literature, it stands to add that not only information, but also the structure of information of business plans matter. Second, to the heuristics & biases literature, it stands to add how investor biases change with time pressure and prior experience. Finally, to entrepreneurs and investors, we stand to inform what biases they can be prone to committing, and how to be aware of them so that when entrepreneurs seek funding, the true economic potential of business are not crowded out by biases. These areas of inquiry have far-reaching implications, but have remained black boxes in extant research.

What are the goals of the project?

The first goal is to test the following hypothesis: There is a causal linkage between variation in structure of business pitches to investor reaction to them. This involves performing field or online experiments where investors/ finance professional subjects are asked to indicate their willingness to fund projects that vary in terms of their structure.

The second goal is to find if the decision-making biases in the experiments have external validity, and the extent to which the biases influence actual investor behaviour. his involves quantitative study whose steps are: i) coding actual business pitches from pitching events, ii) regressing funding outcomes on pitch structure, iii) which will be coded using text-analysis tools such as LIWC, or Topic Modeling technique.


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Study 1 is regression analysis of investor pitches made by entrepreneurs to estimate the overall economic effect of such biases. Data will be from publicly-available sources e.g. demo days & crowdfunding pitches. Funding is required to hire professional transcribers to code audio/ video pitches for preparing the data for text analysis softwares. Study 2 comprises online experiments with subjects to show if such bias exists & if there are causal links between structure of information and investment decisions. I plan to partner with Qualtrics Panels to hire finance professionals as my subjects, costs $10 per subject. I have spent $1200 of personal money and research grant to do a pilot analysis, and the prelim results indicate a statistically significant effect with large effect size. The funding sought will help me take the project to a stage publishable in an A-journal in management, entrepreneurship or psychology.

Endorsed by

As a professional with decade of corporate experience working across entrepreneurial ventures and strategy consulting firms, I consider Sayan’s project as having potential for making important contributions to the field of entrepreneurship. This project has the potential of going much deeper than our current understanding of how investors make their decisions, and how can investor become more aware of (and thus, avoid) such biases. The request for initial funding is extremely essential to kick-start this project, it is my pleasure to back it.

Flag iconProject Timeline

Contingent on successful funding, I plan to carry out the two studies over the next six months. The research design is ready using inputs from my PhD supervisors, and both experiments and archival study are ready to implemented. The first goal is to have a draft and results ready for submission to Strategic Management Society annual conference (deadline 25Feb2018). After which, I will use to feedback received to submit to an A-journal, and send drafts to backers by June 2018.

Aug 25, 2017

Project Launched

Oct 31, 2017

Run online experiments with finance professional subjects, though Qualtrics Panels/ TurkPrime (study 2)

Dec 15, 2017

Transcription and audio/ video investor pitches and preparation of archival data for analysis (study 1)

Jan 15, 2018

Analysis of data collected in studies 1 and 2

Feb 15, 2018

Prepare and revise draft for submission to SMS conference, and share findings with backers

Meet the Team

Sayan Sarkar
Sayan Sarkar
PhD candidate at London Business School

Sayan Sarkar

I joined the PhD programme in Strategy & Entrepreneurship at London Business School in 2015. I received my MBA from Indian Institute of Management, Ahmedabad in 2010, where I was 2nd among 202,000 applicants to the programme, and my BS in Mechanical Engineering from Indian Institute of Technology, Kharagpur in 2007.

My research interests lie in the broad areas of entrepreneurial finance, accelerators and crowdfunding, investor decision-making, and heuristics and biases. At LBS, I work actively with my PhD supervisor, Prof. Gary Dushnitsky. My research project has been recognized by The Deloitte Institute of Innovation and Entrepreneurship and RADMA Trust, UK through research grants received in early 2017.

Prior to joining the programme, I was a Manager at the CEO’s Office of one of the largest generics drug companies of the world, where I worked in the integration PMO for the biggest-ever M&A deal in India’s pharmaceutical industry. I have also worked as a management consultant, advising clients in South and West Asia on market entry, revenue enhancement, and organization design projects.

My research questions are informed by my professional experiences, and I use theories in economics and psychology to understand current phenomena and advance theories in entrepreneurship and entrepreneurial finance.


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