New research shows importance of a strong pitch for entrepreneurs

Aug 28, 2012 by Cassie Williams Jones

(—A new study published online in Entrepreneurship Theory and Practice demonstrates the importance of presentation skills to the success of entrepreneurs seeking funding from potential investors.

The study, "Preparedness and Cognitive as Antecedents of New Venture Funding in Televised Business Pitches," examined data from two television shows built around in search of venture capital—"Shark Tank" and "Dragon's Den"—and determined the key characteristics of successful pitches on the shows. The results revealed that entrepreneurs who showed clear signs of preparedness and a strong handle on their material created credibility with investors and received more funding, regardless of the project.

Jeffrey Pollack, assistant professor of management at the University of Richmond; Matthew Rutherford, associate professor of management in the Virginia Commonwealth University School of Business; and Brian Nagy, assistant professor of management in the Foster College of Business Administration at Bradley University, authored the study, which will appear in the September issue of the journal. The study represents the first time that researchers have been able to combine objective data with the shows' televised presentations to evaluate successful and unsuccessful pitches.

This video is not supported by your browser at this time.

Acquiring funding is a critical step for early-stage entrepreneurs to sustain and build their ventures, and the business pitch is a great way to reach potential investors—often the only way. In order to prove convincing, however, entrepreneurs need more than a great idea and a stylish presentation. They need to overcome their "newness liabilities" and show that their enterprise can be relied upon.

In particular, the study demonstrated the importance of entrepreneurs establishing cognitive legitimacy through their presentations. Through establishing cognitive legitimacy, entrepreneurs remove red flags that undermine investor confidence. It's the ability to indicate to observers that your project can be taken for granted and therefore represents a savvy investment.

Entrepreneurs on "Shark Tank" and "Dragon's Den" managed to establish this cognitive legitimacy with potential investors through different styles of presentations, but common characteristics included skilled storytelling, thorough command of the details, believability, authenticity and strong preparedness.

Explore further: Performance measures for CEOs vary greatly, study finds

More information:

add to favorites email to friend print save as pdf

Related Stories

Technology Start-Ups Get Tips on Starting Out

Dec 14, 2007

Talk more about business and less about technology. Have a solid team. And consider calling on angels. Those were some of the key lessons at a UT Dallas workshop last week for would-be entrepreneurs seeking capital to turn ...

To plan or not to plan is not the right question

Jun 15, 2010

( -- New research from the Bettany Centre for Entrepreneurial Performance & Economics at Cranfield School of Management and the Centre for SMEs at Warwick Business School has revealed that having the right business ...

How successful Chinese entrepreneurs really think

Jan 16, 2012

( -- Can you really learn to be an entrepreneur? A new in-depth study offers fresh insights into how successful business players teach themselves to become better and better at making money.

Recommended for you

Which foods may cost you more due to Calif. drought

1 hour ago

With California experiencing one of its worst droughts on record, grocery shoppers across the country can expect to see a short supply of certain fruits and vegetables in stores, and to pay higher prices ...

Performance measures for CEOs vary greatly, study finds

17 hours ago

As companies file their annual proxy statements with the U.S. Securities and Exchange Commission (SEC) this spring, a new study by Rice University and Cornell University shows just how S&P 500 companies have ...

Investment helps keep transport up to speed

22 hours ago

Greater investment in education and training for employees will be required to meet the future needs of the transport and logistics industry, according to recent reports by Monash University researchers.

User comments : 2

Adjust slider to filter visible comments by rank

Display comments: newest first

not rated yet Aug 28, 2012
Sounds like an Ig Nobel candidate.
not rated yet Aug 28, 2012
Yes, the Pitch is much more important than the product. Hence EEStor gets millions on millions in successive waves of VC funding; and the Firefly battery dies stillborn.

More news stories

Roman dig 'transforms understanding' of ancient port

( —Researchers from the universities of Cambridge and Southampton have discovered a new section of the boundary wall of the ancient Roman port of Ostia, proving the city was much larger than previously ...

Which foods may cost you more due to Calif. drought

With California experiencing one of its worst droughts on record, grocery shoppers across the country can expect to see a short supply of certain fruits and vegetables in stores, and to pay higher prices ...

Robotics goes micro-scale

( —The development of light-driven 'micro-robots' that can autonomously investigate and manipulate the nano-scale environment in a microscope comes a step closer, thanks to new research from the ...

Biologists help solve fungi mysteries

( —A new genetic analysis revealing the previously unknown biodiversity and distribution of thousands of fungi in North America might also reveal a previously underappreciated contributor to climate ...