Showcasing strategies in entrepreneurs’ quest for venture capital funding: Evidence from Twitter


Damiano Morando, Stefano Breschi & Anne ter Wal

It is widely established that entrepreneurs’ social capital is a valuable asset in their search for external funding. However, relatively less is known about how entrepreneurs can actively engage in networking strategies to improve, or exploit, their social capital to attract investment. In this study, we introduce the notion of showcasing behaviors, and assess their effect on entrepreneurial ventures’ ability to obtain a first round of funding. We argue that entrepreneurs have three foundational choices to make when deciding how to showcase the virtues and achievements of their firms: how direct versus indirect, how specific versus generic, and how similar to their role models they want to be. By carefully implementing showcasing strategies, entrepreneurs can increase a venture’s salience and legitimacy among key stakeholders, especially prospective investors. Based on a comprehensive dataset of Lon-don-based technology entrepreneurs combining Crunchbase and Twitter data, we shed light on the ideal recipe for showcasing strategies: to increase the likelihood of obtaining venture capital funding, entrepreneurs need to showcase their similarity to established entrepreneurs in their network, and find a balance between showcasing the achievements of their company and discussing broader issues relevant for their sector.