Bending light: How cognitive styles influence the pitch evaluations and performance predictions of crowdfunded ventures

Richard Chan, Annaleena Parhankangas, Dan Hsu and Pyayt Oo

Journal of Small Business Management, 2025, vol. 63, issue 5, 2220-2254

Abstract: Most entrepreneurial finance studies have treated funders as a monolithic group and ignored individual differences in tastes. This overlook is complicated by prior studies demonstrating how entrepreneurs would utilize either costly to be acquired cues (e.g. patents) that signal venture quality or costless cues that are easily fabricated (e.g. company name fluency) in their pitches to influence investors. We thus investigate how cognitive styles influence heterogeneous crowdfunding backers’ evaluations of pitches in the presence of costly and costless cues. Based on Cognitive-Experiential Self-Theory, we illustrate that a rational thinking style moderate the contrast effect, i.e. costly cues overpowering costless cues, on pitch evaluations and performance predictions for crowdfunded ventures, while an experiential thinking style will attenuate such contrast effect. Findings from two experiments support the moderating effect of a rational thinking style. We demonstrate backers are not monolithic and call for future studies to understand how heterogeneous backers make decisions.

Date: 2025
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DOI: 10.1080/00472778.2024.2424819

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