Does it matter how you tell it? How entrepreneurial storytelling affects the evaluations of Early-stage investors

In this study, we examine how entrepreneurial storytelling influences early-stage investors' evaluations of venture opportunities, by articulating and testing a theoretical model that specifies a set of intervening mechanisms by which influence is exerted. We test our model with a field experiment involving 188 active business angel investors from different regions in the United States. Results from the experiment suggest that entrepreneurial storytelling affects evaluative judgment in an inconsistent manner. While some hypothesized intervening mechanisms are positively related to investors' evaluations as hypothesized, others have a negative effect. The implication is that entrepreneurs seeking to influence investors' evaluations via the story form will have to find ways of capitalizing on the positive effects of storytelling while avoiding its pitfalls. By showing that entrepreneurial stories can influence the evaluative judgments of early-stage investors, our study opens the door for further research on the role of communication strategies in the entrepreneurial resource acquisition process.