Winning Hearts: How Do Emotions Energize Resource Acquisition for New Ventures?

Research on cultural entrepreneurship has highlighted entrepreneurial stories as powerful framing devices for new ventures to acquire resources. Prior research taking a cognitive approach shows that the effectiveness of stories depends on whether they resonate with audiences’ beliefs and understandings. Lacking is a theorization of emotions as an essential element in entrepreneurial narratives. We analyze emotions expressed in pitches of equity crowdfunding in the U.K. and demonstrate that emotions matter in attracting funds. Moreover, we find that an emotional battery—the mix of positive and negative emotions—works better than positive or negative emotions alone. We highlight “emotional resonance with a crowd” as a key mechanism through which emotional batteries contribute to fundraising. We further uncover that while emotional batteries motivate less sophisticated, or the “crowd” audiences, they are less effective in attracting more sophisticated audiences. This research makes three important contributions: 1) showing how emotion and cognition are intertwined to shape audiences’ investing decisions; 2) revealing the underlying mechanism of emotional batteries; and 3) advancing our understanding of audiences’ heterogeneity in appreciating emotional-laden entrepreneurial stories.