by Juan Martinez
Chia-Jung Tsay, an associate professor at the UCL School of Management, asked 1,855 study participants to predict the winners of a total of 19 venture capital pitch competitions after being assigned to review the contestants’ presentations in various ways, including as videos with sound, silent videos, sound recordings, and transcripts. She found that the silent videos best enabled people to identify the entrepreneurs the investors funded. The conclusion: In entrepreneurial pitches, stage presence is everything.
Professor Tsay, defend your research.
Tsay: Most investors would say that when they’re deciding which start-ups to back, they focus on interesting ideas, talented founders, and substantive business plans. But across 12 studies I found that people could predict VC funding decisions based not on the actual content of entrepreneurs’ pitches but on how they were presented, especially body language and facial expressions. Often people watching the silent videos took only a few seconds to correctly identify which pitches had been favored by the investors. In my studies the visuals influenced judgment more than words or other information did.
HBR: How do you know it wasn’t well-designed, information-rich PowerPoint slides that made the visuals so compelling?
The entrepreneurs in the competitions I looked at didn’t use slides, so it was simply their own physical presence that had such a profound impact on decisions.
So both the VCs and the study participants made snap judgments based on what they saw, not what they heard or read?
Yes—but without being fully aware that visuals were having such a strong effect on them. This makes sense. Entrepreneurs need passion, engagement, and energy to be successful, and it’s possible to convey all those things without words. There’s something about the way presenters carry themselves as they walk onto the stage and then make pitches that may reflect their level of preparation and commitment.
But surely the idea and plan count for something, right?
We can’t be certain about the VCs, but the study participants who received more information about the start-ups by reading transcripts or listening to the pitches with or without video felt more confident about their picks than participants who saw only the silent videos. But the participants who got more information were also less likely to identify the entrepreneurs who won over the investors. This underlines the discrepancy between what people say they value and the information that actually drives real-world decisions.
A future step would be to look at the winning start-ups’ outcomes to see if letting visuals drive decisions is a sound investment strategy.
Could it be that professional investors heard something in the presentations of those entrepreneurs that the amateur study participants didn’t?
Great question. That was one of my first guesses too. So I brought in amateurs with little or no experience with start-ups as well as experienced entrepreneurs and angel and repeat crowdfunding investors to review the pitch competitions. It turns out that both the experts and the novices were best able to pick the actual winners based on the silent videos. Professionals may be more knowledgeable, but they seem to be similarly influenced by visuals.
Could this all boil down to people’s tendency to favor attractive entrepreneurs—or worse, white men who look most like prototypical Silicon Valley founders and VCs?
You might think that. But my study participants weren’t able to correctly identify the competition winners at rates significantly over chance using photos alone. So it seems to be less about gender, race, and attractiveness than about dynamic visual information that conveys passion and energy. Of course, many other studies have demonstrated the professional benefits associated with representing the majority-group race or gender or being deemed beautiful or handsome by society. That’s not just in entrepreneurship but in other domains as well.
I should note that I also varied my experiments to check for participants’ bias on these issues and their perceptions about the biases VCs might have. In some studies I asked, “Who won?” In others I asked, “Who do you think should win?” This might seem like a minor nuance, but it’s important. With “Who won?” people can say, “Well, I’m not biased, but the judges probably are, so they chose him or her—for spurious reasons.” Phrased differently, when giving their own opinions, most people try to avoid showing bias based on gender, race, or looks. But my findings were consistent under both conditions. The predictions of people who watched the silent videos best matched the VCs’ decisions.
What was it about the winners’ visual presentation that was so captivating? We’ve published previous research on the importance of hand gestures when showcasing a new product. Is it that kind of body language? Posture? Facial expression?
It’s the passion that comes through in the pitches, which is reflected in a constellation of ways, including energy, gesture, and expression. When I asked participants to identify not the winners but the most passionate entrepreneurs, their choices mapped to the actual winners.
What’s your advice for entrepreneurs making pitches? Develop more stage presence and worry less about your business plan?
I think it’s still important to hone your idea and polish your content. But you should also acknowledge the importance of your visual impression, especially at the start of your pitch, and spend at least a little more time on it. You should consider how you might convey your passion about your idea in a way that feels authentic to you. The judges are likely to assume your enthusiasm reflects a high-quality product and start-up.
What about VCs? Can they guard against this potential visual bias that might or might not play out for them?
I’m hesitant to call it a bias until that’s empirically shown. It’s more like a preference or a shortcut. In some domains people are acknowledging the issue and making attempts to guard against possible bias. For example, one study showed that blind auditions of musicians, where those evaluating the performers couldn’t see them, resulted in the hiring of significantly more female musicians. But well-intentioned as these efforts are, they could lead to a discrepancy between what the judges base their decisions on—sound only—and what the audience enjoys or doesn’t, which includes the visuals.
Right, because how you carry yourself and how people perceive you are important in most jobs—whether you’re a musician or an entrepreneur.
Yes, passion and confidence are related to successful outcomes. That said, if you want to guard against a dependence on visual information, one suggestion would be to avoid work conditions that prompt people to take mental shortcuts. You want to reduce the cognitive load on people so that they have more time to think—for example, by not overwhelming decision-makers with tons of information in a short time frame.
You just described the conditions of a VC pitch competition—lots of ideas and business plans, delivered quickly, all in one day.
Indeed. And the same would be true in a more real-world setting if the investors you’re approaching are taking a lot of meetings and hearing a lot of proposals. They’re going to remember the people who are somehow able to inspire without saying a word.
A version of this article appeared in the September–October 2021 issue of Harvard Business Review.