Digital identity; Authenticity; Venture capital; Twitter; Entrepreneur; Text analysis; LIWC; Digital footprints
Résumé :
[en] An entrepreneur’s digital identity matters for resource acquisition and venture development. However, we know little about the factors that influence or change entrepreneurs’ digital identities. This study explores how entrepreneurs’ digital identities change after a venture capital (VC) funding round. Applying a language-based text analysis to a large sample of tweets from 2,094 US entrepreneurs, we analyze entrepreneurs’ digital identities before and after VC funding. The results of our analysis show that VC funding can impact the entrepreneur’s digital identity in both a positive and a negative way. On the positive side, entrepreneurs increasingly use language indicative of higher self-confidence, positive emotions, and increased professionalism. On the negative side, we find that the entrepreneur’s digital identity loses its authenticity, particularly with high funding amounts raised. The latter can be problematic as authenticity is shown to be a critical resource that entrepreneurs possess to build legitimacy and engage stakeholders in their venture. Our study contributes to research on the consequences of VC funding for entrepreneurs as well as to research on entrepreneurial digital identities. Practical implications exist for entrepreneurs managing their entrepreneurial identities over the course of venture development.
Centre de recherche :
Interdisciplinary Centre for Security, Reliability and Trust (SnT) > EINT-Entrepreneurship, Innovation and New Technology NCER-FT - FinTech National Centre of Excellence in Research
Disciplines :
Gestion de l’entreprise, entrepreneuriat & théorie des organisations
Auteur, co-auteur :
Block, Jörn
Diegel, Walter
FISCH, Christian ; University of Luxembourg > Interdisciplinary Centre for Security, Reliability and Trust (SNT) > Entrepreneurship, Innovation, and New Technology (EINT)
Co-auteurs externes :
yes
Langue du document :
Anglais
Titre :
How venture capital funding changes an entrepreneur’s digital identity: more self-confidence and professionalism but less authenticity!
J. Antonakis L. Atwater Leader distance: a review and a proposed theory Leadersh Q 2002 13 6 673 704
S. Argamon M. Koppel J. Fine A.R. Shimoni Gender, genre, and writing style in formal written texts Text & Talk 2003 23 3 321 346
Balz FP, Brinkmann F, Kanbach DK (2023) The impact of independent and heterogeneous corporate venture capital on firm efficiency. J Bus Venturing Insights, 19, e00384
S.J. Barnes J. Mattsson Building tribal communities in the collaborative economy: an innovation framework Prometheus 2016 34 2 95 113
C.M. Beckman M.D. Burton Founding the future: path dependence in the evolution of top management teams from founding to IPO Organ Sci 2008 19 1 3 24
J. Block P. Sandner F. Spiegel How do risk attitudes differ within the group of entrepreneurs? The role of motivation and procedural utility J Small Bus Manage 2015 53 1 183 206
J. Block H. Fisch C. Vismara S. Andres Private equity investment criteria: an experimental conjoint analysis of venture capital business angels, and family offices J Corp Finance 2019 58 329 352
J.H. Block M. Hirschmann C. Fisch Which criteria matter when impact investors screen social enterprises? J Corp Finance 2021 66 101813
Block JH, Fisch C, Diegel W (2022) Schumpeterian entrepreneurial digital identity and funding from venture capital firms. J Technol Transf, 1–39
G. Bruton V. Fried R.D. Hisrich CEO dismissal in venture capital-backed firms: further evidence from an agency perspective Entrepreneurship Theory and Practice 2000 24 4 69 77
J.W. Carland F. Hoy W.R. Boulton J.A.C. Carland Differentiating entrepreneurs from small business owners: a conceptualization Acad Manage Rev 1984 9 2 354 359
S.M. Carraher J.K. Buchanan G. Puia Entrepreneurial need for achievement in China, Latvia, and the USA Baltic J Manage 2010 5 3 378 396
A. Carsrud M. Brännback Entrepreneurial motivations: what do we still need to know? J Small Bus Manage 2011 49 1 9 26
D. Cetindamar B. Ozkazanc-Pan Assessing mission drift at venture capital impact investors Bus Ethics: Eur Rev 2017 26 3 257 270
S.J. Chang Venture capital financing, strategic alliances, and the initial public offerings of Internet startups J Bus Ventur 2004 19 5 721 741
T.J. Chemmanur M. Gupta K. Simonyan H. Tehranian The relationship between venture capital backing and the top management team quality of firms going public and implications for initial public offerings J Bus Ventur 2021 36 6 106148
T.J. Chemmanur K. Krishnan D.K. Nandy How does venture capital financing improve efficiency in private firms? A look beneath the surface Rev Financial Stud 2011 24 12 4037 4090
Chen L, Gong T, Kosinski M, Stillwell D, Davidson RL (2017) Building a profile of subjective well-being for social media users. PLoS ONE 12 (11), e0187278
V. Collewaert T. Vanacker F. Anseel D. Bourgois The sandwich game: founder-CEOs and forecasting as impression management J Bus Ventur 2021 36 1 106075
M.G. Colombo L. Grilli On growth drivers of high-tech start-ups: exploring the role of founders’ human capital and venture capital J Bus Ventur 2010 25 6 610 626
Crunchbase (2022) The Crunchbase data difference. Retrieved from: https://about.crunchbase.com/products/the-crunchbase-difference. Last accessed: January 25, 2022
D. Cumming S. Johan Information asymmetries, agency costs and venture capital exit outcomes Venture Capital 2008 10 3 197 231
A. Davila G. Foster M. Gupta Venture capital financing and the growth of startup firms J Bus Ventur 2003 18 6 689 708
Drnovšek M, Slavec A, Aleksić D (2023) “I want it all”: exploring the relationship between entrepreneurs’ satisfaction with work–life balance, well-being, flow and firm growth. RMS, 1–28
G. Dushnitsky Z. Shapira Entrepreneurial finance meets organizational reality: Comparing investment practices and performance of corporate and independent venture capitalists Strateg Manag J 2010 31 9 990 1017
J.C. Eichstaedt R.J. Smith R.M. Merchant L.H. Ungar P. Crutchley D. Preoţiuc-Pietro H.A. Schwartz Facebook language predicts depression in medical records Proc Natl Acad Sci 2018 115 44 11203 11208
D. Engel The performance of venture-backed firms: the effect of venture capital company characteristics Ind Innovat 2004 11 3 249 263
M. Ewens M. Marx Founder replacement and startup performance Rev Financial Stud 2018 31 4 1532 1565
N.J. Fast N. Sivanathan N.D. Mayer A.D. Galinsky Power and overconfident decision-making Organ Behav Hum Decis Process 2012 117 2 249 260
E. Fauchart M. Gruber Darwinians, communitarians, and missionaries: the role of founder identity in entrepreneurship Acad Manag J 2011 54 5 935 957
M. Ferrary M. Granovetter The role of venture capital firms in Silicon Valley’s complex innovation network Econ Soc 2009 38 2 326 359
C. Fisch J.H. Block How does entrepreneurial failure change an entrepreneur’s digital identity? Evidence from Twitter data J Bus Ventur 2021 36 1 106015
E. Fischer A.R. Reuber Online entrepreneurial communication: mitigating uncertainty and increasing differentiation via Twitter J Bus Ventur 2014 29 4 565 583
G. Fisher D.F. Kuratko J.M. Bloodgood J.S. Hornsby Legitimate to whom? The challenge of audience diversity and new venture legitimacy J Bus Ventur 2017 32 1 52 71
D.P. Forbes Are some entrepreneurs more overconfident than others? J Bus Ventur 2005 20 5 623 640
V.H. Fried G.D. Bruton R.D. Hisrich Strategy and the board of directors in venture capital-backed firms J Bus Ventur 1998 13 6 493 503
P.A. Gompers Grandstanding in the venture capital industry J Financ Econ 1996 42 1 133 156
P.A. Gompers W. Gornall S.N. Kaplan I.A. Strebulaev How do venture capitalists make decisions? J Finance Econ 2020 135 1 169 190
S.D. Gosling A.A. Augustine S. Vazire N. Holtzman S. Gaddis Manifestations of personality in online social networks: self-reported Facebook-related behaviors and observable profile information Cyberpsychology Behav Social Netw 2011 14 9 483 488
M. Gruber Marketing in new ventures: theory and empirical evidence Schmalenbach Bus Rev 2004 56 164 199
S. Haberstroh Cyberpsychology Behav Social Netw 2010 13 4 455 459
A. Haro-de-Rosario M.D.C. Caba-Pérez L. Cazorla-Papis The impact of venture capital on investee companies: evidence from Spain RMS 2016 10 577 600
M.L. Hayward W.R. Forster S.D. Sarasvathy B.L. Fredrickson Beyond hubris: how highly confident entrepreneurs rebound to venture again J Bus Ventur 2010 25 6 569 578
T. Hellmann M. Puri The interaction between product market and financing strategy: the role of venture capital Rev Financial Stud 2000 13 4 959 984
T. Hellmann M. Puri Venture capital and the professionalization of start-up firms: empirical evidence J Finance 2002 57 1 169 197
M. Hirukawa M. Ueda Venture capital and innovation: which is first? Pac Econ Rev 2011 16 4 421 465
D.H. Hsu What do entrepreneurs pay for venture capital affiliation? J Finance 2004 59 4 1805 1844
Hubner S, Rudic B, Baum M (2021) How entrepreneur’s leadership behavior and demographics shape applicant attraction to new ventures: the role of stereotypes. Int J Hum Resource Manage, 1–36
S. Jain G. George M. Maltarich Academics or entrepreneurs? Investigating role identity modification of university scientists involved in commercialization activity Res Policy 2009 38 6 922 935
E. Kacewicz J.W. Pennebaker M. Davis M. Jeon A.C. Graesser Pronoun use reflects standings in social hierarchies J Lang Social Psychol 2014 33 2 125 143
J.H. Kahn R.M. Tobin A.E. Massey J.A. Anderson Measuring emotional expression with the Linguistic Inquiry and Word Count Am J Psychol 2007 120 2 263 286
S.N. Kaplan P. Strömberg Financial contracting theory meets the real world: an empirical analysis of venture capital contracts Rev Econ Stud 2003 70 2 281 315
N.C. Krämer S. Winter Impression management 2.0: the relationship of self-esteem, extraversion, self-efficacy, and self-presentation within social networking sites J Media Psychol 2008 20 3 106 116
C.N.V. Krishnan V.I. Ivanov R.W. Masulis A.K. Singh Venture capital reputation, post-IPO performance, and corporate governance J Financial Quant Anal 2011 46 5 1295 1333
C. Kudeshia P. Sikdar A. Mittal Spreading love through fan page liking: a perspective on small scale entrepreneurs Comput Hum Behav 2016 54 257 270
J. Lerner The syndication of venture capital investments Financ Manage 1994 23 3 16 27
X. Li K.W. Chan S. Kim Service with emoticons: how customers interpret employee use of emoticons in online service encounters J Consum Res 2019 45 5 973 987
A.S. Litwin P.H. Phan Quality over quantity: Reexamining the link between entrepreneurship and job creation Ind Labor Realt Rev 2013 66 4 833 873
LIWC (2023) LIWC analysis. Available at: https://www.liwc.app/help/liwc. Last accessed: January 10, 2023
A. Lockett M. Wright The syndication of venture capital investments Omega 2001 29 5 375 390
G.T. Lumpkin C.C. Cogliser D.R. Schneider Understanding and measuring autonomy: an entrepreneurial orientation perspective Entrepreneurship Theory and Practice 2009 33 1 47 69
Markowitz DM, Kouchaki M, Gino F, Hancock JT, Boyd RL (2022) Authentic first Impressions relate to interpersonal, social, and entrepreneurial success. Social Psychological and Personality Science, p 19485506221086138
C.M. Mason R.T. Harrison Is it worth it? The rates of return from informal venture capital investments J Bus Ventur 2002 17 3 211 236
M. Maula E. Autio G. Murray Corporate venture capitalists and independent venture capitalists: what do they know, who do they know and should entrepreneurs care? Venture Capital 2005 7 1 3 21
S. Mehdizadeh Self-presentation 2.0: Narcissism and self-esteem on Facebook Cyberpsychology Behav social Netw 2010 13 4 357 364
A.L. Meinecke S. Kauffeld Engaging the hearts and minds of followers: leader empathy and language style matching during appraisal interviews J Bus Psychol 2019 34 4 485 501
Middleton KLW (2013) Becoming entrepreneurial: gaining legitimacy in the nascent phase. Int J Entrepreneurial Behav Res, 19(4)
V. Mohr E. Garnsey G. Theyel The role of alliances in the early development of high-growth firms Ind Corp Change 2014 23 1 233 259
K.J. Moser A. Tumasjan I.M. Welpe Small but attractive: dimensions of new venture employer attractiveness and the moderating role of applicants’ entrepreneurial behaviors J Bus Ventur 2017 32 5 588 610
A. Mumi M. Obal Y. Yang Investigating social media as a firm’s signaling strategy through an IPO Small Bus Econ 2019 53 3 631 645
R. Nahata Venture capital reputation and investment performance J Financ Econ 2008 90 2 127 151
Newman ML, Pennebaker JW, Berry DS, Richards JM (2003) Lying words: predictingdeception from linguistic styles. Personal Soc Psychol Bull 29:665–675
M.L. Newman C.J. Groom L.D. Handelman J.W. Pennebaker Gender differences in language use: an analysis of 14,000 text samples Discourse Processes 2008 45 3 211 236
K. Nyström G.Z. Elvung New firms and labor market entrants: is there a wage penalty for employment in new firms? Small Bus Econ 2014 43 2 399 410
I. O’Neil D. Ucbasaran J.G. York The evolution of founder identity as an authenticity work process J Bus Ventur 2022 37 1 106031
M. Obschonka C. Fisch R. Boyd Using digital footprints in entrepreneurship research: a Twitter-based personality analysis of superstar entrepreneurs and managers J Bus Venturing Insights 2017 8 13 23
G.T. Payne J.L. Davis C.B. Moore R.G. Bell The deal structuring stage of the venture capitalist decision-making process: exploring confidence and control J Small Bus Manage 2009 47 2 154 179
J.W. Pennebaker R.L. Boyd K. Jordan K. Blackburn The development and psychometric properties of LIWC2015 2015 Austin, TX University of Texas at Austin
A.P. Petkova V.P. Rindova A.K. Gupta No news is bad news: sensegiving activities, media attention, and venture capital funding of new technology organizations Organ Sci 2013 24 3 865 888
J.C. Picken From startup to scalable enterprise: laying the foundation Bus Horiz 2017 60 5 587 595
T.G. Pollock B.R. Fund T. Baker Dance with the one that brought you? Venture capital firms and the retention of founder-CEOs Strateg Entrepreneurship J 2009 3 3 199 217
T.G. Pollock V.P. Rindova Media legitimation effects in the market for initial public offerings Acad Manag J 2003 46 5 631 642
E.E. Powell T. Baker In the beginning: Identity processes and organizing in multi-founder nascent ventures Acad Manag J 2017 60 6 2381 2414
L. Pratch Value-added investing: a framework for early stage venture capital firms J Private Equity 2005 8 3 13 29
S. Quinton D. Wilson Tensions and ties in social media networks: Towards a model of understanding business relationship development and business performance enhancement through the use of LinkedIn Ind Mark Manage 2016 54 15 24
Rudic B, Hubner S, Baum M (2021) Hustlers, hipsters and hackers: potential employees’ stereotypes of entrepreneurial leaders. J Bus Venturing Insights, 15, e00220
C.D. Ryff Entrepreneurship and eudaimonic well-being: five venues for new science J Bus Ventur 2019 34 4 646 663
F.U. Salmony D.K. Kanbach Personality trait differences across types of entrepreneurs: a systematic literature review RMS 2022 16 3 713 749
H.J. Sapienza S. Manigart W. Vermeir Venture capitalist governance and value added in four countries J Bus Ventur 1996 11 6 439 469
T. Schifeling D. Demetry The new food truck in town: geographic communities and authenticity-based entrepreneurship Organ Sci 2021 32 1 133 155
Schwartz HA, Eichstaedt JC, Kern ML, Dziurzynski L, Ramones SM, Agrawal M, …, Ungar LH (2013) Personality, gender, and age in the language of social media: the open-vocabulary approach. PLoS ONE, 8(9), e73791
B.D.C. Seigner H. Milanov E. Lundmark D.A. Shepherd Tweeting like Elon? Provocative language, new-venture status, and audience engagement on social media J Bus Ventur 2023 38 2 106282
Y. Shi B. Zou R.S. Santos Dr. Jekyll and Mr. Hyde: how do academic entrepreneurs deal with identity conflict? RMS 2021 15 2165 2191
C.C. Shih T.M. Lin P. Luarn Fan-centric social media: the Xiaomi phenomenon in China Bus Horiz 2014 57 3 349 358
C. Smith J.B. Smith E. Shaw Embracing digital networks: entrepreneurs’ social capital online J Bus Ventur 2017 32 1 18 34
M. Sørensen How smart is smart money? A two-sided matching model of venture capital J Finance 2007 62 6 2725 2762
A. Soto-Simeone T. Kautonen Senior entrepreneurship following unemployment: a social identity theory perspective RMS 2021 15 1683 1706
B. Steinmann S.K. Ötting G.W. Maier Need for affiliation as a motivational add-on for leadership behaviors and managerial success Front Psychol 2016 7 1972
V. Taecharungroj Starbucks’ marketing communications strategy on Twitter J Mark Commun 2017 23 6 552 571
Y.R. Tausczik J.W. Pennebaker The psychological meaning of words: LIWC and computerized text analysis methods J Lang Social Psychol 2010 29 1 24 54
A.L. Ter Wal O. Alexy J. Block P.G. Sandner The best of both worlds: the benefits of open-specialized and closed-diverse syndication networks for new ventures’ success Adm Sci Q 2016 61 3 393 432
W. Tov K.L. Ng H. Lin L. Qiu Detecting well-being via computerized content analysis of brief diary entries Psychol Assess 2013 25 4 1069 1078
A. Tumasjan R. Braun B. Stolz Twitter sentiment as a weak signal in venture capital financing J Bus Ventur 2021 36 2 106062
W. Wang I. Hernandez D.A. Newman J. He J. Bian Twitter analysis: studying US weekly trends in work stress and emotion Appl Psychol 2016 65 2 355 378
R.J. White R.R. D’Souza J.C. McIlwraith Leadership in venture backed companies: going the distance J Leadersh Organizational Stud 2007 13 4 121 132
D.G. Winter A motivational analysis of the Clinton first term and the 1996 presidential campaign Leadersh Q 1998 9 3 367 376
U. Witt Firms as realizations of entrepreneurial visions J Manage Stud 2007 44 7 1125 1140
S. Wu G.K. Dagher Need for achievement, business goals, and entrepreneurial persistence Manage Res News 2007 30 12 928 941
J.H. Yang S. Liu Accounting narratives and impression management on social media Acc Bus Res 2017 47 6 673 694
S. Yang R. Berger Relation between start-ups’ online social media presence and fundraising J Sci Technol Policy Manage 2017 8 2 161 180
J.G. York I. O’Neil S.D. Sarasvathy Exploring environmental entrepreneurship: Identity coupling, venture goals, and stakeholder incentives J Manage Stud 2016 53 5 695 737
J. Zhang The advantage of experienced start-up founders in venture capital acquisition: evidence from serial entrepreneurs Small Bus Econ 2011 36 2 187 208
