ENTREPRENEUR'S BODY COMMUNICATION, INVESTOR PERCEPTIONS, FIRM FORECAST ERRORS AND VALUATION

We use computer vision software to analyze body expansiveness as a communication mechanism in entrepreneurs' pitches. We obtain 2D skeletal information from 154 videos of entrepreneurs and examine whether body expansiveness is associated with financial forecasts, valuation, firm performance, and funding success. We find that more expansive entrepreneurs show higher forecast revenue and income errors, higher valuations, lower probability of survival, yet more likely to get funding. These findings suggest that investors fail to fully incorporate nonverbal information in their decision-making processes. We further find that these results do not extend to older and VC-backed startups, indicating that governance mitigates these associations.