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Persuasive or polarizing? The influence of entrepreneurs' use of ingratiation rhetoric on investor funding decisions

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  • Sanchez-Ruiz, Paul
  • Wood, Matthew S.
  • Long-Ruboyianes, Anna

Abstract

We add richness and depth to investor decision-making research by exploring the influence of entrepreneurs' use of ingratiation rhetoric in their investor pitch presentations on investor funding decisions. Drawing on ingratiation theory, we model the effects of flattery, self-deprecation, opinion conformity, and self-promotion as distinct forms of ingratiation rhetoric. We do so independently and in tandem, conceptualizing the confluence of ingratiation forms as driving an overall aggregate effect on the amount of funding allocated by investors. We then theorize that entrepreneur charisma and entrepreneur performance are moderators of the aggregate effect. We test our model in the angel investment context with data from 789 entrepreneur pitch presentations to 27 investors on the Shark Tank television program from 2009 through 2020. We find that on their own, the different forms of ingratiation rhetoric have mixed effects, with flattery and self-deprecation negatively impacting investor funding amount and opinion conformity and self-promotion positively relating to funding amount. When used together, we find an overall negative effect, and this effect is positively moderated by entrepreneur charisma and entrepreneur performance. These findings shed new light on ingratiation rhetoric as a powerful force in entrepreneurs' efforts to secure funding.

Suggested Citation

  • Sanchez-Ruiz, Paul & Wood, Matthew S. & Long-Ruboyianes, Anna, 2021. "Persuasive or polarizing? The influence of entrepreneurs' use of ingratiation rhetoric on investor funding decisions," Journal of Business Venturing, Elsevier, vol. 36(4).
    • Handle: RePEc:eee:jbvent:v:36:y:2021:i:4:s0883902621000306
    DOI: 10.1016/j.jbusvent.2021.106120
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