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Training Aspiring Entrepreneurs to Pitch Experienced Investors: Evidence from a Field Experiment in the United States

Author

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  • David Clingingsmith

    (Weatherhead School of Management, Case Western Reserve University, Cleveland, Ohio 44106)

  • Scott Shane

    (Weatherhead School of Management, Case Western Reserve University, Cleveland, Ohio 44106)

Abstract

Accredited investors finance more than 75,000 U.S. startups annually. We explain how training aspiring entrepreneurs to pitch their new business ideas to these investors affects their odds of continued funding discussions. We model accredited investors’ decision to continue investigation as a real option whose value is a function of their experience and the information contained in the entrepreneurs’ pitches. We derive four hypotheses from the model, which we test through a field experiment that randomly assigns pitch training at four elevator pitch competitions. The data support all four hypotheses and are inconsistent with alternative explanations.

Suggested Citation

  • David Clingingsmith & Scott Shane, 2018. "Training Aspiring Entrepreneurs to Pitch Experienced Investors: Evidence from a Field Experiment in the United States," Management Science, INFORMS, vol. 64(11), pages 5164-5179, November.
    • Handle: RePEc:inm:ormnsc:v:64:y:2018:i:11:p:5164-5179
    DOI: 10.1287/mnsc.2017.2882
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    References listed on IDEAS

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    2. Peter Coughter, 2012. "The Art of the Pitch," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-137-51233-8, December.
    3. Parhankangas, Annaleena & Ehrlich, Michael, 2014. "How entrepreneurs seduce business angels: An impression management approach," Journal of Business Venturing, Elsevier, vol. 29(4), pages 543-564.
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    Cited by:

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    6. Gonzalez-Uribe, Juanita & Hmaddi, Ouafaa, 2022. "The multi-dimensional impacts of business accelerators: what does the research tell us?," LSE Research Online Documents on Economics 115461, London School of Economics and Political Science, LSE Library.

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