Characteristics of Successful Entrepreneurial Pitches

This study will look at how pitch characteristics impact their success.

2018-10-30

2018-11-21

1) Difference in reply rates to pitches sent by male entrepreneurs (WM+AM) and female entrepreneurs (WF + AF).
2) Difference in reply rates to pitches sent by white entrepreneurs (WM + WF) and Asian American entrepreneurs (AF + AM).
3-4) 1 and 2, but looking at "interested" replies which will be coded as detailed below.

Coding of interested replies will be done by RAs based on anonymized emails.

Interested replies are replies that suggest the sender is open to further contact. E.g.:
- replies that send contact information or request a meeting
- requests for more information
- actively forwarding of the email to someone who may be interested
- replies expressing interest in other ways

Non-interested replies are replies that are not interested and do not wish for further contact. E.g.:
- replies saying it is not a good fit due to industry
- replies saying the respondent is no longer investing
- replies expressing disinterest in other ways

All rates will be expressed as the # replies received / # emails sent in that condition that did not bounce.

The following secondary outcomes are all of interest. In many cases, they are looking at interaction terms and as such will

5-6) Primary outcomes 1 and 2, but looking at web page visits as a metric. (Note - this may not be possible as we may end up removing web page links due to spam filtering)
7-8) Interaction of race and gender terms in 1 and 3.
9-12) Homophiliy (difference in gender difference in rates between men and women and similarly for race). We do not expect power from the gender regressions due to the small sample of women.
13-14) Gender congruence (pitches will be rated on mechanical turk on probability founder is female, we will test if pitches that are more "feminine" show a different pattern of gender differences).
15-18) Regressions 1-4 but looking at the difference between VCs and angels. .

This study will look at how pitch characteristics impact their success.

Randomization will be done in office by a computer.

Each investor will be matched to four industries. One of each of the four founder types (WM, WF, AM, AF) will be assigned to each of the pitches.

No

30,000 investors receiving 4 emails each.

Our initial sample will include contact information for approximately 30,000 investors. We will exclude recipients whose email addresses do not work. We estimate approximately 1/10th of the sample will be excluded in this manner.

It is unlikely that participants will find receiving four emails over a month surprising. However, it is possible that participants will detect that they are part of a study. We will stop emailing and exclude any participants who make reference to the existence of a research experiment or who mention specifics of other emails.

130,000 emails.

~30,000 emails in the each of four conditions.

We expect 10-20% of recipients will visit the web pages, 5-10% will reply, and 2.5-5% will send interested replies. Based on this, we will be able to detect a 0.4-0.5% change in open rates, a 0.3-0.4% change in reply rates, and a 0.2-0.3% change in interested reply rates. Those correspond to a 3-4%, 4-5%, and 5-8% change in the base rates, respectively. It is possible our response rates will be lower due to our messages being flagged as spam or other reasons. If so, our power will be correspondingly lower.

We study gender and race in high-impact entrepreneurship using a tightly controlled randomized field experiment. We sent out 80,000 pitch emails introducing promising but fictitious start-ups to 28,000 venture capitalists and angels. Each email was sent by a fictitious entrepreneur with a randomly selected gender (male or female) and race (Asian or White). Female entrepreneurs received a 9\% higher rate of interested replies than male entrepreneurs pitching identical projects and Asian entrepreneurs received a 6\% higher rate than their White counterparts. We find no indication that investors show bias against Asians or females when evaluating unsolicited pitch emails. Our results suggest that investors do not discriminate against female or Asian entrepreneurs when initially evaluating unsolicited pitches.

Gornall, Will and Strebulaev, Ilya A., Gender, Race, and Entrepreneurship: A Randomized Field Experiment on Venture Capitalists and Angels. Available at SSRN: https://ssrn.com/abstract= or http://dx.doi.org/10.2139/ssrn.3301982

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3301982