Shades of Grey or Black and White? How Entrepreneurs’ Use of Cognitively Complex Language Affects Investor Funding
Figge P, Graf-Vlachy L, König A, Demann F, Diessner M (2025)
Publication Type: Journal article
Publication year: 2025
Journal
Book Volume: 49
Pages Range: 1535-1564
Journal Issue: 6
DOI: 10.1177/10422587251347042
Abstract
We examine how entrepreneurs’ use of cognitively complex language—language that involves nuance, differentiation, and comparison—influences funding decisions of early-stage investors. Our theorizing builds on the notion that individuals interpret language as a social signal and attribute another person’s language use to that person’s general dispositions. On this basis, we surmise that investors perceive an entrepreneur as more cognitively complex—that is, engaging in more nuanced and differentiated thinking—the more the entrepreneur uses cognitively complex language. Arguing that perceived cognitive complexity matches investors’ prototypical construals of entrepreneurial competence, we hypothesize a positive relationship between an entrepreneur’s use of cognitively complex language and the investment amount they receive. Drawing on our theoretical framework, we also argue that signaling cognitive complexity has a decreasing marginal effect, and that elite education functions as a credibility signal, amplifying the association between cognitively complex language and investment amount. A field study of 547 actual investment pitches and a randomized experiment with 240 professionals support our ideas. Our study introduces a more nuanced portrayal of complexity in entrepreneurial communication, accentuates the role of entrepreneurs’ signals of cognitive dispositions, and introduces the concept of cognitive complexity, and linguistic displays thereof, to entrepreneurship theory.
Involved external institutions
Universität Passau
Germany (DE)
Technische Universität Dortmund
Germany (DE)
Technische Universität München (TUM)
Germany (DE)
Germany (DE)
Technische Universität Dortmund
Germany (DE)
Technische Universität München (TUM)
Germany (DE)
How to cite
APA:
Figge, P., Graf-Vlachy, L., König, A., Demann, F., & Diessner, M. (2025). Shades of Grey or Black and White? How Entrepreneurs’ Use of Cognitively Complex Language Affects Investor Funding. Entrepreneurship Theory and Practice, 49(6), 1535-1564. https://doi.org/10.1177/10422587251347042
MLA:
Figge, Patrick, et al. "Shades of Grey or Black and White? How Entrepreneurs’ Use of Cognitively Complex Language Affects Investor Funding." Entrepreneurship Theory and Practice 49.6 (2025): 1535-1564.
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