Swimming in the Shark Tank: Charisma and Angel Investors

Seminar summary

We examine the role of charisma in influencing angel investor decisions. Given that new ventures are at an early stage of development, objective and factual information about the quality of the venture and its performance are often unavailable. Hence, prior literature suggests that angel investors focus on the entrepreneurs, their characteristics and other informational cues when evaluating a new venture. The manner in which entrepreneurs communicate information about their ventures during pitch presentations is purported to have a significant impact on investment decisions. In this context, we examine whether charismatic signalling influences the likelihood of receiving funding in a controlled setting by employing an objective measure of charisma. Using transcripts from Shark Tank episodes from 2009 to 2021, we find that charisma positively influences the likelihood of attracting funding from angel investors after controlling for factors expected to affect investment decisions. Additional analyses examining the role of gender suggests that charisma influences angel’s investment decisions regardless of the gender of the entrepreneur. The findings are robust to controlling for the number of sentences as well as to using an errors-in-variable (EIV) regression and a two-stage least squares procedure (2SLS) to correct for measurement error. Overall, they contribute to our understanding of the role of charisma in the context of entrepreneurial financing and they have practical implications for entrepreneurs determined to secure funding for their new ventures.

How to attend this seminar

This seminar is free to attend with no need to register in advance.

We welcome you to join us online on Wednesday 31 May 2023 at 2pm

Speaker bio

Professor Vicky Kiosse

Vicky is an Associate Professor of Accounting and Director of Postgraduate Research in Finance & Accounting. Her research interests focus on capital market-based research, financial accounting and reporting, accounting standard-setting, pensions, non-GAAP reporting, disclosures and corporate responsibility. Her research has been published in top tier international journals such as Human Resource Management Journal, European Accounting Review and Journal of Accounting, Auditing and Finance among others and has received media attention.
Vicky is an ad hoc Associate Editor for British Accounting Review, an editorial board member of British Accounting Review and the Accounting Forum and an ad hoc reviewer for several other international journals.