Great Startup Pitches Might Be Just That

New research finds that investors can be swayed by great startup pitches – when the people pitching the startup ideas are enthusiastic, excited, and warm. But these ideas might be just that; ideas. They often don’t prove fruitful.

Co-authored by Yale SOM’s Prof. Song Ma, an assistant professor of finance at Yale SOM, and Allen Hu, a doctoral candidate at the school, the research reveals an unexpected pattern in great startup pitches and the venture capital funding that follows.

The researchers found that the pitches with team members that looked happier and more positive were 17% more likely to receive funding. Pitches with teams that sounded more enthusiastic were 27% more likely to receive funding. Pitches with teams that used warmer and more engaging language were also more likely to be funded.

While, teams that discussed their own ability or competitiveness were penalized. This research may help to understand some of the ways that human biases affect economic decision making.