Are the Life and Death of a Young Start-Up Indeed in the Power of the Tongue? Lessons from Online Crowdfunding Pitches

May 9, 2013 Leave a comment

Are the Life and Death of a Young Start-Up Indeed in the Power of the Tongue? Lessons from Online Crowdfunding Pitches

Dan Marom Hebrew University of Jerusalem – Jerusalem School of Business Administration; Hebrew University of Jerusalem

Orly Sade Hebrew University of Jerusalem – Department of Finance

April 23, 2013

Abstract: 
Securing seed funding is one of the biggest challenges for any entrepreneur. While presenting an initiative to potential investors, the entrepreneur can choose the extent to which she presents herself, versus presenting the project idea. This research investigates not only this decision, but also the effect of this decision on the success of the fundraising in a leading crowdfunding financing platform (Kickstarter). In our empirical analysis, we use a text mining quantification method validated by experiment and robustness tests. This methodology was implemented on a dataset that was collected by custom software, and which includes more than 20,000 online business pitches and their crowdfunding results. Our findings indicate clearly that in Kickstarter fundraising, entrepreneurs’ descriptions do matter – projects which highlighted their entrepreneurs enjoyed higher rates of success, controlling for other relevant variables.

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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