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Blowing Smoke? How Early-Stage Investors Interpret Hopeful Discourse within Entrepreneurially Oriented Business Plans

Author

Listed:
  • Wales William

    (Management, University at Albany, State University New York, Albany, NY, USA)

  • Cox Kevin C.

    (Management, Florida Atlantic University, Boca Raton, FL, USA)

  • Lortie Jason

    (Florida Gulf Coast University, Institute for Entrepreneurship, Fort Myers, FL, USA)

  • Sproul Curtis R.

    (Georgia Southern University College of Business Administration, Statesboro, GA, USA)

Abstract

This study examines how written expressions of entrepreneurial orientation (EO) and hope may affect investor evaluations of funding potential in business plan competitions. To understand why some firms are evaluated more favorably, we combine screening and signaling theory when analyzing early-stage venture-investor communication. Findings support that expressions of EO while business planning contribute to greater expressions of hope to cope with the Knightian uncertainty when developing new business models. Results suggest that the impact of hopeful dialogue on investor impressions of fundability critically depends upon the presence or absence of past founder financial investment. Implications for future research are discussed.

Suggested Citation

  • Wales William & Cox Kevin C. & Lortie Jason & Sproul Curtis R., 2019. "Blowing Smoke? How Early-Stage Investors Interpret Hopeful Discourse within Entrepreneurially Oriented Business Plans," Entrepreneurship Research Journal, De Gruyter, vol. 9(3), pages 1-16, July.
    • Handle: RePEc:bpj:erjour:v:9:y:2019:i:3:p:16:n:1
    DOI: 10.1515/erj-2018-0114
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