Two Studies on the Importance of Founding Narratives to Entrepreneurial Pitch Success

By Richard Gruss & Zachary A. Collier. They both teach at Radford University.

"Abstract

 

One crucial function of the entrepreneurial pitch is to alleviate investor uncertainty about committing funds to a startup in the early stages of development. New ventures rarely have sufficient hard data to substantiate their future success quantitatively, so investors often need a qualitative reason for putting their faith in the entrepreneur. Storytelling, as a powerful and time-honored method of transforming the intangible into the tangible, can go a long way toward establishing legitimacy and alleviating uncertainty. In this research, we empirically test whether the inclusion of an origin story in an entrepreneurial pitch significantly increases the probability of obtaining funding. This research consists of two studies. In the first study, we analyzed 486 pitches from six seasons of ABC’s Shark Tank and observed a significant relationship between the presence of a founder story and funding success. In the second study, we confirmed causality via a randomized controlled experiment. This finding has implications for entrepreneurs, in that it encourages them to concentrate on the narrative they are telling in their pitches. It also has implications for investors, in that it invites them to reflect on how important investment decisions might be swayed by presentational aspect of pitches."

3 Obscure Business Storytelling Books Every Leader Should Read Now

By Esther Choy of Forbes. Excerpts:

"For some time now, storytelling has been understood as a powerful leadership tool. When storytelling is promoted in a business setting, the main benefit ascribed to it is its potential to give an audience information in a quick and memorable way. As neuroscientist Paul Zak’s studies have demonstrated, stories give audiences “better understanding of the key points a speaker wishes to make and enable better recall of these points weeks later.”

However, storytelling has the potential to have an even greater impact. Since COVID, we have seen an increasing appetite for personal narratives and for taking a human-centered approach to organizational structures. As the popularity of Brene Brown’s leadership text Daring Greatly bears witness to: human connection is a vital ingredient for personal and professional thriving. Brown explains, “Connection is why we're here… it's what gives purpose and meaning to our lives.”

It is a culture of storytelling that can drive this kind of connection that focuses on purpose and meaning. The three books on this must-read list below are for leaders who want to understand the full potential of creating a storytelling culture. Though these books are not obviously business storytelling books, if you read them, you will walk away with a firm understanding of why storytelling is a game changer for any organization that wants to empower its people to connect, speak up, and think creatively."

1. Career Counseling: A Narrative Approach by Larry Cochran (SAGE Publishing, 1997)

"This book effectively linked the power of narrative-making to the business world. Understanding how stories help us see and know ourselves will empower you to tell stories that create workplace connection and cohesion.

Cochran’s theory moved the field of career counseling beyond assessments and personality tests, by getting people to dig deeper to understand themselves through storytelling. With narrative-building tools, Cochran argues, people are able to investigate and understand the hidden web of influences that are shaping them into the people they are becoming. Without these narratives, we too often rely on cliches or what we’ve heard others say before to make sense of our own trajectories. Narratives can help us reflect on and understand our own intrapersonal choices. Though writing to an audience of career counselors, the frameworks are applicable to other areas of business leadership and intrapersonal awareness."

"2. Tell Me a Story: Narrative and Intelligence by Roger Schank (Northwestern University Press, 1995)

3. How To Be Interesting: In 10 Simple Steps by Jessica Hagy (Workman Publishing, 2013)"

"Storytelling is integral to everything we do"

That is a quote from the late Hasbro executive Brian Goldner. See Toy Executive Pushed Industry to Be Big-Screen Powerhouse by Paul Ziobro of The WSJ. Excerpts:

"Brian Goldner believed toys should have a leading role in Hollywood.

A rising star at Hasbro Inc. just a few years after joining the company in 2000, Mr. Goldner was making trips to California to pitch studios, producers, and others on a big-budget, live-action movie based on Transformers, a toy line of transforming robots the company launched in the 1980s.

Mr. Goldner waxed poetic about the franchise’s characters and lore. When he was done, he often heard laughter, or silence, his colleagues have said. Hasbro, at the time, made toys for movies like “Star Wars”—not the other way around.

He eventually got buy-in from film director Steven Spielberg, who signed on as executive producer. The six Transformers movies have logged more than $4 billion in box-office sales world-wide, overcoming doubters—including some inside Hasbro—who advised him to stay away from Hollywood. “I don’t think I abided by that very much,” Mr. Goldner had said."

"He pushed Hasbro far beyond toys and deeper into entertainment using a strategy to build bigger audiences around Hasbro’s brands through storytelling. That, in turn, would drive sales of toys, merchandise and more. During his 13 years as CEO, Hasbro’s market value nearly tripled.

“Storytelling is integral to everything we do,” Mr. Goldner said in 2015."