 Breaking “Bad”: Negativity’s benefit for entrepreneurial fundingJayaram Uparna and Chris Bingham Journal of Business Research, 2022, vol. 139, issue C, 1353-1365 Abstract: How does sentiment in a pitch affect an entrepreneur’s fundraising outcomes? Although research suggests that negativity in entrepreneurial “pitches” to investors adversely impacts resource acquisition, there is a lack of empirical research showing whether, and to what extent, this is true. We study over 30,000 entrepreneurial loan requests from one of the largest loan marketplaces to understand how the sentiment in text-only pitches to investors affects fundraising. In contrast to prior literature, we find that negatively-worded pitches are funded faster than positively-worded ones. We also find that negatively-worded pitches result in lower interest rates to entrepreneurs. Finally, we find that negatively-worded loans default less, suggesting that the benefits of negativity are not one-sided but two-sided: negativity helps both resource seekers and resource providers. Collectively, the results from our study reveal how negativity can be beneficial in impression management and offer fresh insights for the psychological foundations of entrepreneurship. Keywords: Entrepreneurship; Social-support; Sentiment; Crowdfunding; Narrative; Content-analysis; Prosocial-lending (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:139:y:2022:i:c:p:1353-1365 DOI: 10.1016/j.jbusres.2021.07.005 Access Statistics for this article Journal of Business Research is currently edited by A. G. Woodside More articles in Journal of Business Research from Elsevier |
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