Pitching with passion? ‘More enthusiastic’ presentations could discourage investors, study finds

TAMPA – A new study by researchers at the University of South Florida offers entrepreneurs sound sales advice: When pitching to investors for funding, pitch a high-octane product with great enthusiasm is a double-edged sword.

The study revealed a negative side of exaggerated product presentations. In other words, displaying a high level of enthusiasm through energetic body movements and animated facial expressions may lead investors to suspect that entrepreneurs have an ulterior motive – that they use large hand gestures and varied voice tones as an impression management tactic.

“For entrepreneurs looking to raise funds, the more enthusiastic is not necessarily the better,” said Lin Jiang, assistant professor of entrepreneurship at USF Muma College of Business.

Jiang and Dezhi Yin, a research fellow at USF Muma College of Business, co-authored the article titled “The More Enthusiastic, the Better?” Unveiling a Negative Pathway From Entrepreneurs’ Displayed Enthusiasm to Funders’ Funding Intentions,” which was published online last month in Entrepreneurship Theory and Practice, a leading scholarly journal in entrepreneurship and ranked among the best journals by the Financial Times.

Entrepreneurs often pitch their business ideas to investors to attract crowdfunding. Jiang and his co-authors investigated whether showing great enthusiasm during a funding pitch always helps an entrepreneur acquire money for a new venture.

The study found that showing enthusiasm can make investors feel positive and view the entrepreneur favorably, but there is a downside. An entrepreneur’s enthusiastic expressions could backfire, causing investors to question the entrepreneur’s underlying motivations.

Additionally, an investor’s negative reaction to an enthusiastic product pitch increases if the entrepreneur is seen as less competent, according to the study.

The researchers reached their conclusions through a sample of 1,811 participants who evaluated 182 crowdfunding projects and by conducting a randomized experiment with 273 participants.

In the experiment, the researchers hired an actor to present the same product pitch in two different ways – one with great enthusiasm and one without. Viewers were randomly assigned to watch one of these videos and asked how likely they would be to fund the project.

“Our results suggest that showing enthusiasm is not always effective for entrepreneurs to raise funds, especially for those who lack the expertise needed for the business,” Jiang said. “There are both positive and negative ways to display your enthusiasm through energetic body gestures, varying pitches of voice, or animated facial expressions.”

The study’s co-authors also included Dong Liu from the Georgia Institute of Technology and Richard Johnson from the University of Missouri.

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