Pitching Your Entrepreneurial Idea to get Investors Interested? Know When to be Enthusiastic, When to Rein it In
By Keith Morelli
TAMPA (April 24, 2019) -- Picture this: You’ve come up with a viable idea that is ready for the marketplace and you’re pitching your idea to potential investors or customers who need to be talked into backing your venture.
You begin your pitch. Rehearsed, methodical. This will work. It’s within reach.
Things look to be going well. Sensing a receptive audience about to loosen some purse strings, you let go a smile, maybe a giggle at a harmless pun you just made.
Did you just sink or elevate your chances? Three researchers with the University of South Florida’s Muma College of Business and Georgia Tech’s Scheller College of Business have some answers about displaying emotions during pitches, when such exhibitions can be helpful and when they are less effective.
“When entrepreneurs pitch their ideas to attract funding, they are often advised to display positive emotions; joy and enthusiasm for example,” said Lin Jiang, lead author of the soon-to-be published paper titled “Can Joy Buy You Money? The Impact of the Strength, Duration and Phases of an Entrepreneur’s Peak Displayed Joy on Funding Performance.” The paper was accepted for publication in an upcoming issue of the Academy of Management Journal.
Their findings reveal that although displays of stronger joy can elevate the receptivity of the audience, displaying strong joy for too much of the time or at inopportune times may dampen the receptivity.
“Little guidance exists on how to manage the intensity and timing of emotional displays, but we were curious about what we could do about it.” Jiang said. “So, we dived into the literatures on temporal aspects of emotions and searched for data and tools that allowed us to do the research.”
Jiang, assistant visiting professor in entrepreneurship; Dezhi Yin, assistant professor in the ISDS Department and Dong Liu, associate professor in organizational behavior at Georgia Tech, ended up analyzing data from more than 8 million frames in 1,460 pitch videos, with the latest facial expression analysis techniques.
“The pitch videos came from Kickstarter, one of the biggest crowdfunding platforms,” Jiang said. “We selected all live projects on randomly picked days and downloaded the pitch videos. To measure entrepreneurs’ emotional displays, we analyzed their faces in the videos using a software called FaceReader.
“This software can recognize subtle facial expressions and make reliable assessments of displayed emotions by taking advantage of facial expression analysis techniques, artificial intelligence and big data analytics,” she said.
It took two years from the time the team began collecting data until its conclusions were made.
“The findings unveil the benefit of pitching with a greater level of peak displayed joy, especially during the beginning and ending phases of a pitch,” said the research abstract. “Past research has approached this question mostly by treating emotional displays as static and focusing on the overall or average levels of displayed emotions.
The research took a dynamic approach to examine the “peak” moments – the intensity and duration – of emotional displays during the different phases of their pitches. Not only did the findings shed light on the importance of emotion temporal dynamics during pitches, but they also unveiled the unique research opportunities of facial expression analyses in terms of marketing and management.
Jiang, who teaches creativity and innovation in entrepreneurship and strategic management/decision making, has published research in several top academic journals. This research is an extension of the research team’s work. Last year, at the Academy of Management Specialized Conference in the United Kingdom, she, Yin and Liu presented a paper titled “The More Cheerful the Better? The Role of Emotional Valence and Variability in Attracting Crowdfunding.”
“This research suggests that entrepreneurs should pay special attention to the intensity and timing of their peak displayed joy when pitching to potential stakeholders,” she said. “Think about the most excited or happiest moment in a pitch. The higher the joy level in those moments, the better the pitch outcome. This is because when the audiences are making a decision after watching a pitch, they tend to remember the peak emotional moments more than other moments. And an entrepreneur’s joyful display tends to make the audiences feel more pleasant and more confident about the entrepreneur.”
Additionally, the study highlights the need of entrepreneurs to manage the total time length of their peak joy moments.
“Although a greater level of peak displayed joy is associated with a better pitch outcome, more time at the peak joy level can negatively impact the pitch outcome because prolonged peaks may prompt audiences to draw negative inferences,” the researchers wrote in their summary. “Thus, entrepreneurs should display a higher peak joy, but they should avoid displaying a prolonged peak joy in their funding pitch.”
When emotions are displayed can be just as important as how much, Jiang said.
“Entrepreneurs should pay special attention to the beginning and ending phases of their pitches,” she said. “That’s when they should strive to reach a higher peak displayed joy level in order to more effectively attract the audience.
“Entrepreneurs should not display peak joy for too long,” she said, “even during the beginning phase of a funding pitch.”
When and how much emotion to display, it turns out, is more important than previously believed.
“Managing emotional displays,” Jiang said, “is critical for entrepreneurs to successfully communicate and market their venture ideas.”