Clark, C. (2008). The impact of entrepreneurs' oral 'pitch' presentation skills on business angels' initial screening investment decisions. Venture Capital (London), 10(3), 257-279. https://doi.org/10.1080/13691060802151945

• Clark, C. (2008). The impact of entrepreneurs' oral 'pitch' presentation skills on business angels' initial screening investment decisions. Venture Capital (London), 10(3), 257-279. https://doi.org/10.1080/13691060802151945 

Original research paper. In it, Clark finds that the style of entrepreneurs' pitch presentations matters to VC's post-presentations intentions to fund or not fund. By "style," he specifically means presentational factors such as clarity of voice, confidence when speaking, not stuttering, etc. To find this, he went to a VC lunch in which three startups were presenting, and he distributed a survey to the VCs in the audience. Clark got 24 VCs to fill out the survey for each of the three startups. The survey's had 32 factors or line items that the VCs rated on a scale from terrible to exceptional, though somewhere, too, Clark also had the VCs specify their reasons for their decisions. 

The study mainly responds to Mason & Harrison:

One context in which entrepreneurs’ personal attributes, social competencies and, in particular, their communication skills would be expected to have a major impact on investors’ decisions are entrepreneurs’ oral pitch presentations. Given the popularity and potential economic consequence of these presentations, however, it is surprising that very little research has been conducted into this method of communicating an investment opportunity. Indeed, aside from the aforementioned research conducted by Baron and Brush (1999), the author has been able to find only one other such study, conducted in the UK by Mason and Harrison (2003). Mason and Harrison analysed the reactions of 30 business angels to a video recording of an entrepreneur’s real-life pitch presentation (delivered at a previously held investor forum) and found that the entrepreneur’s presentational skills had a decisive impact on the business angels’ post-presentation evaluations. Most of the business angels stated they would have rejected this entrepreneur’s investment opportunity and cited presentational weaknesses relating to the clarity, content and structure of the presentation as their main reasons for doing so.

This study builds on Mason and Harrison’s (2003) research in three distinct and novel ways. Mason and Harrison employed two qualitative research methodologies to capture comments about the entrepreneur’s presentation that was evaluated – a real-time method where the participating business angels were invited, while watching the video recording of the entrepreneur’s presentation, to write down their remarks about that presentation, and a post-presentation focus group to provide additional information about the participants’ collective opinions of that presentation. These comments were then linked to the business angels’ decisions about whether or not they would have been interested in pursuing the entrepreneur’s investment opportunity. For the present study, however, and in addition to providing the potential investors studied with the opportunity to make real-time comments about the entrepreneurs’ presentations and to state their likely post-presentation investment- related intentions [didn't catch this part], a more quantitative approach was adopted: the business angels also evaluated each presentation with respect to a variety of pre-specified ‘presentational’ and ‘non-presentational’ criteria using percentage-based rating scales. By these means this study was able to more formally determine and statistically quantify two things – first, whether and to what extent the business angels’ perceptions of the general quality and content of the entrepreneurs’ presentations influenced their investment-related screening decisions, and second, what level of relative influence presentational and non-presentational factors had on their presentation evaluations and screening decisions. 

there are striking similarities between the findings reported in this paper, especially the general subject matter of the business angels’ presentational comments (see Table 5), and those reported in Mason and Harrison (2003), from a different but similarly small entrepreneur–business angel dataset. In particular, the business angels’ comments in Mason and Harrison (2003) were also focused on issues relating to clarity, understandability and presentational structure, and the entrepreneur was criticized for providing insufficient detail (about the market, product and pricing strategy) and, more generally, for not being able to sell himself or his investment opportunity. At the very least the findings reported in this paper provide further evidence showing that the ways in which an investment opportunity is presented and via which entrepreneurs communicate themselves, their company and their investment opportunities is a subject that deserves to receive much further attention from researchers. With the above caveats in mind, the rest of this paper attempts to draw out the principal implications and practical recommendations of the study findings. 

Business plan citations:

in the single case analysis of a VC thinking aloud while evaluating an entrepreneur’s business plan conducted by Sandberg, Schweiger, and Hofer (1988), presentational factors relating to the business plan’s content, organizational style, format and understandability featured in over 20% of the VCs’ investment decision- related comments. Similarly, research by Mason and Rogers (1996, 1997) of business angels’ reactions to an entrepreneur’s written business plan found that presentation- related issues such as not providing sufficient information and failing to adequately address the concerns the business angels have when evaluating investment opportunities were key factors that resulted in the entrepreneur’s investment opportunity being rejected. 

Thirdly, and more generally, the decision making that investors engage in when evaluating entrepreneurs’ oral presentations appears to have all the character of being a highly unsystematic, idiosyncratic and error-prone process that is the very antithesis of the diligent, ‘hard evidence’, ‘substance’-based appraisal process preferred by investors. In the data collected for this study the business angels’ screening decisions were reached very quickly (immediately after or, according to many of the business angels studied, even during the entrepreneurs’ 15-minute presentations) – a practice that is similar to the speed at which investors reach decisions about the merits of entrepreneurs’ written business plans – VCFMs typically spending less than six minutes (Hall and Hofer 1993) and, in another study, between 10 and 15 minutes (Sweeting 1991) and, in the case of business angels, a median time of six minutes (Mason and Rogers 1997). 

In general, Clark's research is trying to catch VCs in the act of being human--oooh look, subjectivity is leaking into a supposedly objective process! Call the cops or something...

Differently put, Clark's research is vying for the importance for soft skills (or what I think he calls human capital) in entrepreneurial training. 

The problem for this study just seems to be the empirical move (i.e., people say it works, but we don't really know if it works...)

Although many business and government agencies, investor forum organizers and private companies can readily be found on the internet offering advice and training courses for entrepreneurs to deliver more effective oral presentations to potential investors, the evidence for entrepreneurs’ presentation skills actually having an influence on investors’ screening and funding decisions is still largely intuitive and anecdotal.  

The part I keep coming back to the is "post- hoc rationalization bias" problem. I just looked it up and apparently, it's a thing in entrepreneurial studies:

I'm guessing this problem is, if you have VCs record their decisions after the fact, then you open yourself up to the criticism that the VCs are only recording the reason they wanted to be influenced by, rather than the reason they were really influenced by. 

This is what I think happened. The VCs more or less cited that the reasons they wanted to invest or not invest has to do with more substantive issues such as the business model or financial projections or whatever. This contradicts or is at least at odds with how much importance they attributed to non-presentational factors in the survey portion of the research. Thus, what Clark says is kind of like what C. Granz et al say in the screenshot above, namely, that think-aloud protocols are better than post-hoc decision-making studies. In the case of Clark, he seems to be basically arguing that the high importance entrepreneurs attributed to presentational factors in the survey seems to override the their after-the-fact rationalizations because the former occurred in the moment and at a less reflective level, hence Clark's emphasis on "quickly":

Somewhat fortuitously, because of the way different elements of the post-presentation questionnaire were completed by the business angels, this study may have captured this lack of awareness and/or highlighted this form of post- hoc rationalization bias. More specifically, the act of evaluating each entrepreneur’s presentation by rapidly circling a number on the rating scale for each factor evaluated (rather than the answer(s) to the question that explicitly invited the business angels to specify their reason(s) for their post-presentation intentions) may have captured more accurately both the tacit, gut-reaction, inference-based process entrepreneurs engage in when making screening decisions as well as the actual level of influence presentational factors had on the business angels’ screening decisions.  

Ok, interesting:

Presentational factors (relating to the entrepreneurs’ style of delivery, etc.) tended to have the highest influence on the overall score an entrepreneur received as well as on business angels’ level of investment interest. However, the business angels appeared to be unaware of (or were reluctant to acknowledge) the influence presentational factors had on their investment-related decisions: the stated reasons for their post-presentation intentions were focused firmly on substance-oriented non- presentational criteria (company, market, product, funding/finance issues, etc.). More generally, comments about the entrepreneurs’ presentations centred on presentational issues relating to clarity/understandability and structure, the level of information provided, the entrepreneurs’ personal characteristics, and their ability to sell themselves and their investment opportunity. 

That's from the abstract. So I was right. Whereas statistically speaking, presentational factors were related most closely to or rather correlated most positively with an inclination to invest, VCs listed non-presentational reasons for why they'd like to invest. Moreover, I think most of the VCs comments were about presentational factors as well. 

My guess is, this is similar to what happens when grading papers. People will be like, this paper sucks, then when asked why, they'll say because of its grammar. 

The intention to invest wasn't a part of the 32 factors:

"For the question that invited the business angels to state what their post-presentation intentions were likely to be regarding each entrepreneur’s investment opportunity, three answer options were provided: (1) ‘Interested’ (i.e. ‘will consider this investment opportunity further’); (2) ‘Undecided’ (i.e. ‘still uncertain about what to do’); and (3) ‘Not interested’ (i.e. ‘will not consider this investment opportunity further’). Table 2 shows the number of business angels that stated they were ‘Interested’, ‘Undecided’ or ‘Not interested’ in pursuing one or more of the entrepreneurs’ investment opportunities, and the number of each type of post-presentation intention response each entrepreneur received."

https://utexas.box.com/s/twf0k9woovlo2brc7k8grm6xuvi08rv9