UCL School of Management professor Chia-Jung Tsay has been featured in the Wall Street Journal in which she discusses the key to attracting venture capitalists: passion.
Exploring the factors that may encourage venture capitalists to invest in a particular business, Chia created a series of 12 studies whereby investors received different types of content from pitch competitions and were asked to identify the actual winner. 1,855 novices and experienced investors participated in the studies and were given either audio only, video only, video plus audio, or transcript excerpts.
The studies found that investors who saw segments of silent videos were more able to accurately identify the winning pitches, and the data suggest that the most impactful factor that swayed their opinion was the passion from entrepreneurs that emerged through visual cues.
The research holds valuable lessons for both entrepreneurs and investors alike, as the findings may encourage entrepreneurs to remember how much they care about their companies. Delivering a passionate pitch, Chia suggests, should be one area of focus for company founders, as opposed to crafting presentations that may overwhelm potential investors with information.
Investors should also be receptive to Chia’s research. The findings suggest that venture capitalists, without their full awareness, allow visual cues and impassioned pitches to dominate their ability to process facts. During competitions with many candidates and little time, investors may end up depending on these visual shortcuts.