Entrepreneurs who combine figurative language and skilled gestures when pitching to investors are more likely to secure funding, says Mark Healey.
Start-up founders who use ideational gestures when pitching can trigger mental imagery in the minds of potential investors about how their product or service is used, making the venture more concrete and easier to understand.
That’s one of the key findings of research conducted by Alliance MBS and other partners across Europe. The researchers found that this can increase the likelihood of an investor backing their business by an average of 12%, according to the study.
In particular, researchers examined what makes a successful business pitch and what types of language and gestures could be adopted by entrepreneurs to convince investors to support their ventures.
They found that an entrepreneur’s ability to paint mental imagery in the minds of potential investors plays a key role in guaranteeing investment. Combining complex gestures about the product or business with simpler ‘beat’ gestures that emphasise key parts of a pitch was found to be a highly effective strategy.
Dr Mark Healey from Alliance MBS says academics first studied entrepreneurs as they pitched to seasoned investors at a regional technology investment forum in the North of England. They chose this particular event as technology entrepreneurs are more likely to face challenges when communicating their ideas to investors due to the complexity of their businesses.
They observed significant variation in how entrepreneurs used speech and gestures. In particular they found that entrepreneurs used four main strategies when pitching:
1. a ‘literal’ approach, a technical description that involves little figurative speech and little use of gestures
2. a ‘rhetorical’ approach, using considerable figurative speech to explain the venture but with little gesturing
3. a ‘demonstrative’ approach, which involves little figurative speech but relies on an animated delivery through the repetitive use of gestures
4. an ‘integrative’ approach, which features a high level of both figurative speech and gestures
In a subsequent experiment using video pitches with 124 experienced investors, the researchers found that entrepreneurs who combined ideational gestures that symbolise parts of their business - for example its growth, its product, or how the product works - with beat gestures that signify certain aspects of speech were better able to convey investment rationale to potential investors.
Says Dr Healey: “Entrepreneurs pitching their businesses typically have only between five and 10 minutes to impress and convince investors why they deserve financial backing. This short timeframe makes it even more important to ensure they’ve persuaded and communicated clearly what makes their business deserving of investment.
“The prevailing view is that the words and stories entrepreneurs choose matter and that body language helps them communicate their passion. We found that skilled gesturing not only matters more than we thought, but that it does much more than make entrepreneurs seem passionate. For instance it also helps them communicate important ideas about how their products and businesses work.
“This is the first study of its kind that really delves into the impact of using certain gestures during a pitch. An increase in the likelihood of securing an investment is significant and underlines why entrepreneurs should focus on their presenting skills as well as their verbal messaging.”
The research was conducted by Alliance MBS in partnership with Emlyon Business School in France and Erasmus University in the Netherlands.
This research was recently published in the Academy of Management Journal.