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The sandwich game: Founder-CEOs and forecasting as impression management

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  • Collewaert, Veroniek
  • Vanacker, Tom
  • Anseel, Frederik
  • Bourgois, Dries

Abstract

Drawing on impression management and social exchange theory, we examine the use of positively biased forecasts by (non-)founder-CEOs as an impression management tactic vis-à-vis their existing investors. Contrary to their non-founder counterparts, founder-CEOs identify more with the venture they founded and, therefore, experience greater instrumental and affective concerns about the long-term relationship with their investors. Consequently, we hypothesize that founder-CEOs will strategically provide less positively biased forecasts to their investors than non-founder-CEOs. Using two independent samples with revenue forecasts reported to different venture capital investors and a causal chain scenario study consisting of two experiments, we find consistent support for our hypothesis. Overall, this study provides new insights into the use of forecasts as a post-investment impression management tactic by distinct types of CEOs in entrepreneurial ventures.

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  • Collewaert, Veroniek & Vanacker, Tom & Anseel, Frederik & Bourgois, Dries, 2021. "The sandwich game: Founder-CEOs and forecasting as impression management," Journal of Business Venturing, Elsevier, vol. 36(1).
    • Handle: RePEc:eee:jbvent:v:36:y:2021:i:1:s0883902620306832
    DOI: 10.1016/j.jbusvent.2020.106075
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