The Effect of Entrepreneur Attributes on Investment Evaluations in Pitch Competitions

Abstract

Investment in early-stage ventures entails significant risk and uncertainty; for this reason, most investment pitches do not result in investments. Whereas the literature in entrepreneurial financing indicates that investors rely on their gut feelings, it remains unclear which entrepreneur attributes factor into this type of intuitive judgment. This study presents a holistic model of entrepreneur attributes as they relate to inventors’ evaluation of funding potential. The model is divided into three categories: entrepreneur–investor relational attributes, entrepreneur motivational attributes, and venture performance-influence attributes. The model is then tested on real-time pitch competitions, by analysing data from technology start-up entrepreneurs, psychologist evaluators, and investors. The model is grounded in dual-processing theory and signalling theory. It is hypothesised that investors base their evaluations on their intuitive judgment of the entrepreneurs. Entrepreneurs’ competence, coachability, passion, preparedness, and leadership are shown to be associated with investors’ evaluations of funding potential.