Pitching to Win Hearts: The Effects of Relational Communication on Entrepreneurial Funding Pitches

Abstract

Entrepreneurial communication in funding pitches has long been considered a means of persuasion by which the pitching entrepreneur acquires resources. Angel investors on the receiving end of a pitch, however, report looking for more than just the attributes of an entrepreneur, prioritizing instead the ‘interpersonal chemistry’ and ‘collaborative potential’ they feel from an interaction when making investment decisions. Building on this existing literature, we introduce a relational view to funding pitches, that considers pitching as an exercise in relationship-building, as an alternative to the traditional model of communication as persuasion. In two experimental studies, we test the effects of verbal and nonverbal relational cues on perceptions of the entrepreneur’s coachability, and how willing investors are to make mentorship and/or monetary commitments to the entrepreneur. Counter to what we theorize, we find that high levels of relational communication, that builds rapport and rhetorical identification between interactants, makes an entrepreneur appear less coachable, and thereby renders them as less likely to be mentored. This relationship is further mediated by perceptions of the entrepreneur’s humility. We discuss theoretical and practical implications of these findings, and distinguish between social competence and coachability competence.