Abstract

Entrepreneurial stories are useful resource acquisition tools (Martens, Jennings & Jennings, 2007). Current literature, however, only partially articulates the mechanisms by which stories affect investors’ decisions. Stories have typically been portrayed as instruments to demonstrate the credibility of the venture idea and the entrepreneurial team itself. We argue that stories have some non-rational functions as well. Our idea is that stories invoke additional motivations that may make the investment attractive. Furthermore, we believe that stories also invoke in investors positive affect that renders them more likely to positively assess the investment opportunity; we infer that this assessment is often experienced by investors as “gut feel” (Zacharakis & Shepherd, 2007). In short, we propose that investor decision making is much more than a cognitively rational process, and we seek to examine how stories help create impressions that translate into investment decisions.

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