Yes today, no tomorrow: Exploration of deal cancellations in televised pitch competitions

Livia Boerner () and Bernd Frick ()
Additional contact information
Livia Boerner: Paderborn University
Bernd Frick: Paderborn University

No 123, Working Papers Dissertations from Paderborn University, Faculty of Business Administration and Economics

Abstract: Early-stage entrepreneurs exert significant efforts to secure deals with angel investors during televised startup pitch competitions. However, a substantial number of these deals are cancelled during the subsequent due diligence process. Drawing upon interpersonal persuasion theory and information asymmetries in the pitch context, we investigate deal cancellations as instances of biased communication and strategic misrepresentation. Analyzing a novel dataset comprising N = 1,334 pitches from the British format Dragons’ Den and the German format Die Höhle der Löwen, we explore the occurrence and determinants of deal cancellations. Our examination delves into differences related to gender and team size of the involved parties, pitch format, and the level of financial risk. Our findings reveal a bias against female investors, higher cancellation rates for more costly deals and a significant country effect. This work sheds light on the usually opaque due diligence processes and interpersonal dynamics inherent in entrepreneurial finance, offering new insights into the black box of deal cancellations.

Keywords: Business angels; Information asymmetry; Due diligence; Overconfidence; Gender differences (search for similar items in EconPapers)
JEL-codes: D81 D91 G24 G41 L26 (search for similar items in EconPapers)
Pages: 33
Date: 2024-09
References: Add references at CitEc
Citations:

Downloads: (external link)
http://groups.uni-paderborn.de/wp-wiwi/RePEc/pdf/dispap/DP123.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pdn:dispap:123

Access Statistics for this paper

More papers in Working Papers Dissertations from Paderborn University, Faculty of Business Administration and Economics Contact information at EDIRC.
Bibliographic data for series maintained by WP-WiWi-Info ().