Sounds novel or familiar? Entrepreneurs' framing strategy in the venture capital market

Lingling Pan, Xiumei Li, Jianhong Chen and Tianxu Chen

Journal of Business Venturing, 2020, vol. 35, issue 2

Abstract: This study offers a theoretical perspective from which to examine entrepreneurial ventures' linguistic strategies. Drawing on the framing perspective, we introduce two concepts—novelty frames and familiarity frames—and examine how the use of these linguistic frames may influence entrepreneurial ventures' ability to obtain funding from venture capitalists (VCs) in different industry contexts. Based on a sample of 2883 U.S. information technology (IT) ventures and 5849 investment events from 2003 to 2014, we show that novelty and familiarity frames individually and interactively shape the amount of funding. We also found that industry capital intensity enhances the positive effects of familiarity frames. These findings highlight the role of entrepreneurial ventures' linguistic frames in shaping their funding opportunities.

Keywords: Entrepreneurship; Linguistic strategy; Framing; Venture capital (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbvent:v:35:y:2020:i:2:s0883902617308492

DOI: 10.1016/j.jbusvent.2019.02.003

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