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Pitching with passion? 'More enthusiastic' pitches could turn off investors, study finds

TAMPA – A new study from researchers at the University of South Florida offers entrepreneurs some savvy sales advice: when pitching to investors for funding, a high-octane product pitch with great enthusiasm is a double-edged sword.

The study revealed a negative side to over-the-top product pitches. That is, exhibiting a high level of enthusiasm through energetic body movements and animated facial expressions can make investors suspect entrepreneurs have an ulterior motive —- that they are using the big hand gestures and varied vocal tones as an impression management tactic.

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“For entrepreneurs pitching to raise funding, the more enthusiastic is not necessarily the better,” said Lin Jiang, an assistant professor of entrepreneurship at the USF Muma College of Business.

Jiang and fellow USF Muma College of Business researcher Dezhi Yin co-authored the article titled, “The More Enthusiastic, the Better? Unveiling a Negative Pathway From Entrepreneurs’ Displayed Enthusiasm to Funders’ Funding Intentions,” which was published online last month in Entrepreneurship Theory and Practice, a leading scholarly journal in entrepreneurship and ranked among the top journals by the Financial Times.

Entrepreneurs often pitch their business ideas to investors to attract crowdfunding. Jiang and her co-authors sought to answer whether showing great enthusiasm during a funding pitch always helps an entrepreneur acquire money for a new venture.

The study revealed that showing enthusiasm can make investors feel positive and view the entrepreneur favorably, but there is a downside. An entrepreneur’s enthusiastic expressions could backfire, making investors question the entrepreneur’s underlying motives.

Moreover, an investor’s negative reaction toward an enthusiastic product pitch increases if the entrepreneur is viewed as less competent, the study found.

Researchers drew their conclusions through a survey sample of 1,811 participants who evaluated 182 crowdfunding projects and through conducting a randomized experiment among 273 participants.

In the experiment, researchers hired an actor to present the same product pitch in two different ways -— one with high enthusiasm and one without. Viewers were randomly assigned to watch one of these videos and asked to indicate how likely they would be to fund the project.

“Our findings suggest that displaying enthusiasm may not always be effective for entrepreneurs to raise funding, especially for those who lack the needed expertise for the venture,” Jiang said. “There are both positive and negative pathways for displaying your enthusiasm through energetic body gestures, varied vocal pitches, or animated facial expressions.”

The study’s co-authors also included Dong Liu at the Georgia Institute of Technology, and Richard Johnson at the University of Missouri.

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