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Investors Can Be Greatly Influenced By Enthusiastic Startup Pitches, According to Yale Study


The Lure of an Enthusiast Startup Pitch

Investors can be greatly influenced by enthusiastic startup pitches, regardless of the strength of the business plan, according to a new study from Yale's School of Management ("SOM"). The study, coauthored by Song Ma, an assistant professor of finance at SOM, and Allen Hu, a doctoral candidate at SOM, is helping identify areas where human biases may affect economic decision making.

Ma and Hu studied over 1,100 pitch videos, and used machine learning technology and algorithms to consistently analyze the "visual", "vocal", and "verbal" dimensions to determine each video's overall enthusiasm.

"The researchers found people overwhelmingly—and incorrectly—associated positive presentations with stronger performance." - Yale Insights


The Researchers Found That:

  • Teams that looked happier/positive were 17% more likely to receive funding.

  • Teams sounding more enthusiastic were 27% more likely to receive funding.

  • Teams with warmer/more engaging language were more likely to be funded.

  • Teams that discussed their own ability or competitiveness were penalized.

  • Overall, an above-average Pitch Factor increased investment likelihood by 35%.

  • For teams composed entirely of women, investment decisions were 7x more sensitive to the performance of the pitch.

  • For teams comprising both genders, the performance of the male appeared to drive investment decisions, suggesting that women are simply ignored when they present alongside men.

Implications and Takeaways For investors, the takeaway is a greater sense of self-awareness when it comes to presentation bias. It also calls for putting more stock into the business plan over the presentation. Ma suggests exploring additional ways in which machine learning and algorithms can aid in accounting for these biases.  Another solution Ma proposes, is bringing a diverse team with different viewpoints to the table, which could potentially cancel out certain biases. “This interaction bias is very important" says Ma, "and we should look for ways to reduce or counteract it.” For more on the study, read the full Yale article here: A Passionate Startup Pitch Is Powerful—But Can Be Misleading


This is not a solicitation or offer to buy or sell securities. There is no guarantee that any specific outcome will be achieved.


About Boustead Securities, LLC Boustead Securities, LLC (“Boustead”) is an investment banking firm that executes and advises on IPOs, mergers and acquisitions, capital raises and restructuring assignments in a wide array of industries, geographies and transactions, for a broad client base. Boustead’s core value proposition is the ability to create opportunity through innovative solutions and tenacious execution. With experienced professionals in the United States, Boustead’s team moves quickly and provides a broad spectrum of sophisticated financial advice and services. Boustead is a majority owned subsidiary of Boustead & Company Limited, a diversified non-bank financial institution. For more information, please visit www.boustead1828.com. About Boustead & Company Limited  Boustead & Company Limited is a diversified and comprehensive non-bank financial institution with offices in Los Angeles, New York, San Francisco, London and Beijing that is rapidly expanding in growth markets throughout the US and Asia. Through its principals and fully licensed subsidiaries, Boustead & Company possesses rich experience and exceptional capabilities in capital markets deal execution and is dedicated to providing best-in-class one-stop financial services to clients. Boustead’s comprehensive financial services platform consists of four operating units: Boustead Securities, LLC a US-based FINRA Broker/Dealer and middle-market investment bank; Sutter Securities Group, Inc., which owns four FINRA-regulated entities, Sutter Securities, Inc., Sutter Securities Clearing, LLC and FlashFunders Funding Portal, LLC, along with Sutter Securities Financial Services, Inc., Sutter Capital Partners, LLC a California Registered Investment Advisor; and Boustead Capital Markets, LLP a London-based FCA-regulated company. For more information, please visit www.bousteadco.com. Forward-Looking Statements This document contains forward-looking statements.  In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing.  We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us.  Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities.  You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms.  In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business.  These and other factors may cause our actual results to differ materially from any forward-looking statement.  Forward-looking statements are only predictions.  The forward-looking events discussed in this document and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties and assumptions about us.  We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forward-looking events discussed in this document and other statements made from time to time by us or our representatives might not occur.

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