The sandwich game: Founder-CEOs and forecasting as impression management

Veroniek Collewaert, Tom Vanacker, Frederik Anseel and Dries Bourgois

Journal of Business Venturing, 2021, vol. 36, issue 1

Abstract: Drawing on impression management and social exchange theory, we examine the use of positively biased forecasts by (non-)founder-CEOs as an impression management tactic vis-à-vis their existing investors. Contrary to their non-founder counterparts, founder-CEOs identify more with the venture they founded and, therefore, experience greater instrumental and affective concerns about the long-term relationship with their investors. Consequently, we hypothesize that founder-CEOs will strategically provide less positively biased forecasts to their investors than non-founder-CEOs. Using two independent samples with revenue forecasts reported to different venture capital investors and a causal chain scenario study consisting of two experiments, we find consistent support for our hypothesis. Overall, this study provides new insights into the use of forecasts as a post-investment impression management tactic by distinct types of CEOs in entrepreneurial ventures.

Keywords: Forecasts; Venture capital; Founder; Impression management; Social exchange theory (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbvent:v:36:y:2021:i:1:s0883902620306832

DOI: 10.1016/j.jbusvent.2020.106075

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