As discussed by Bergh et al. (2014, p. 1354), “Firms whose behavior is difficult for outsiders to discern and who send ambiguous signals present important problems for researchers to explore.” Along these lines, in the context of early-stage venture investments, screening arises due to the large number of ventures seeking funding and an abundance of weak signals. Screening theory captures how recipients prioritize among the types of noisy signals they receive based upon their preferences and what unobservable characteristics they believe that the signals imply and are associated with (Gomulya and Mishina 2017). Screening theory suggests that receivers, judges, buyers, investors, etc. filter alternative offerings or proposals based upon the signals they receive and what they interpret them to mean (Sanders and Boivie 2004). Signal receivers have certain norms and expectations that, when not met, may cause them to look unfavorably upon a potential offering or proposal (Weiss 1995).

This research proposes that screening theory can improve our understanding of how investors sort business plans based on observed linguistic choices and impressions, which influence investor perceptions of new ventures’ underlying potential value. Business plans are a primary tool for entrepreneurs seeking funding and represent formal communications and appeals to investors that their ideas are meritorious (Mason and Stark 2004). Past research in entrepreneurship has often focused on how potentially favorable venture signals are interpreted, such as management experience (Kirsch, Gera, and Goldfarb 2009). However, recently studies have considered broader heuristic cues that may affect investor screening decisions (Chen, Kotha, and Yao 2009). Scholars have investigated the color of images in business plans (Chan and Park 2015), overall plan preparedness (Brush, Edelman, and Manolova 2012; Parhankangas and Ehrlich 2014), verbal presentation enthusiasm (Cardon, Mitteness, and Sudek 2016), and suggested the need to consider other factors such as the linguistics employed. The investigation of such heuristics is particularly relevant when considering challenging or noisy contexts as typified by early-stage investment screening (Chan and Park 2015). In this vein, business planning and early-stage venture communication emphasizes and depends upon effective impression management beyond the “facts of the case” (Parhankangas and Ehrlich 2014).

In this research, we consider screening theory (Sanders and Boivie 2004) alongside signaling theory (Spence 1973) as two fundamental sides of communication within uncertain contexts. Signaling theory conceptually differs from screening theory in terms of which party is the dominant actor (Gomulya and Mishina 2017). Both theories assume information asymmetry between senders and receivers (Connelly et al. 2011); however, screening theory focuses on uninformed receivers’ active use of filtering routines to choose among potential senders (Weiss 1995), whereas signaling theory emphasizes informed senders’ efforts to achieve a separating equilibrium from their peers (Bergh et al. 2014).

Signaling theory posits that higher quality organizations attempt to identity and leverage signals that are difficult and costly for lesser quality organizations to claim or falsify, thereby providing the presumably higher-quality organizations with a distinguishable advantage that perceptibly distances themselves from their peers within a competitive marketspace (Connelly et al. 2011; Spence 1973). If such signals are unable to be identified, a situation of pooling equilibrium is manifest in which receivers are unable to sort firms based upon quality. A variety of signals have been considered and investigated within the entrepreneurship literature including founder involvement and experience (Busenitz, Fiet, and Moesel 2005), venture capital investment and involvement (Davila, Foster, and Gupta 2003), founder CEO status (Wang and Song 2016), and board characteristics (Certo 2003). Akin to the broader management and strategy literature (Bergh et al. 2014), the value and strength of potential signals have been shown to be context dependent within new ventures as well (Moss, Meyskens, and Neubaum 2015). That is, EO-focused microenterprise funding narratives on a well-vetted crowdfunding platform might present a costly signal (Moss, Meyskens, and Neubaum 2015), whereas comparable narratives within an open business plan competition may not carry similar penalties for exaggeration or misrepresentation. As such, signaling theory remains an important research area in entrepreneurship (Connelly et al. 2011).

EO represents an entrepreneurial strategy-making approach characterized by the simultaneous exhibition of innovation, risk taking, and proactiveness (Deb and Wiklund 2017; Eggers et al. 2017; Miller 2011; Pérez-Luño, Saparito, and Gopalakrishnan 2016; Rauch et al. 2009). In this vein, EO can be communicated to investors through written documents and communications such as an IPO prospectus, shareholder letter, or venture business plan (Mousa, Harper, and Wales 2015; Short et al. 2010). Past empirical evidence suggests that EO may have a positive relationship with the funding potential of new ventures (Cox, Lortie, and Gramm 2016; Cox and Sproul 2015). However, as evident in research conducted by Cox and Lortie (2015), this relationship can be relatively weak, and may be due to differences in terms of how much progress ventures have obtained towards their stated goals.

Yet, most all new ventures are confident of high-growth. In the context of new venture business plans, EO perhaps does not constitute a strong signal because there are few costs associated with its imitation. Investors expect entrepreneurially oriented language (Moss, Meyskens, and Neubaum 2015), it would be missed if it was absent, and anyone can use EO language in an attempt to convince judges about their plans fundability. While entrepreneurially oriented language is expected, many entrepreneurially oriented plans do not achieve their goals, thereby reinforcing the insufficiency of entrepreneurially oriented messages to represent a stable separating equilibrium among venture plans. A situation of pooling equilibrium is manifest in which all ventures offer similar signals and judges are left unsure which to believe (Bergh et al. 2014).

Nonetheless, while EO does not meet the criteria of a strong signal, when interpreted from the perspective of screening theory, investors may be more likely to screen out plans that are low in EO. A considerable amount of previous empirical research has consistently found the core dimension of EO to be an important characteristic of attractive startups (Maxwell, Jeffrey, and Levesque 2011). Innovation (e. g. Mason and Stark 2004; Mason and Harrison 2002; Stedler and Peters 2003), proactiveness and passion (Haines, Madill, and Riding 2003; Mitteness, Sudek, and Cardon 2012) and pursuing high-upside opportunities (Mason and Stark 2004; Sudek 2006) have all been shown to be positive facets of attractive ventures. That is, when evaluating business plans, entrepreneurially oriented ideas and impressions are praised by early-stage investors that generally seek to reward ventures which have brought new perspectives to bear on how to address potential product-market opportunities (e. g. Moss, Meyskens, and Neubaum 2015; Stedler and Peters 2003).

A screening perspective suggests that since early-stage ventures are high risk, investor judges would look for the possibility of entrepreneurially enabled high growth potential to evaluate them favorably (Freear, Sohl, and Wetzel Jr 1995; Wong, Bhatia, and Freeman 2009). Investors may screen plans for EO as a favorable observable characteristic within business plans given that the truly desired attributes of growth potential, probability of attaining additional rounds of funding, and likelihood of bringing favorable media attention to the business plan competition for promoting innovative ideas are difficult to forecast at such an early stage of venture development. Investor judges may assume that more entrepreneurially oriented plans have greater potential to “make a splash”, more easily attract further investment, and have better chances at above-average growth. Thus, we expect:

Hypothesis 1: EO improves investor evaluations of a business plan.

Hope represents an influential element within the new venture context (e. g. Hmieleski and Carr 2008), and its expressions may be particularly relevant to early-stage ventures seeking outside investment. Organizational hope is defined as the common goal-directed energy and belief that pathways exist with which to accomplish key organizational goals (Luthans, Avolio, and Norman 2007; McKenny, Short, and Payne 2013; Snyder 2000a; 2000b; Snyder, Anderson, and Irving 1991). While organizational hope has been largely absent from management and organizational science (Ludema, Wilmot, and Srivastva 1997), theory suggests it is relevant to entrepreneurship. The phenomenon of goal-directed beliefs that pathways to success exist (McKenny, Short, and Payne 2013; Snyder 2000) offers a critical potential bridge between entrepreneurially oriented ideas, and perceptions of their attainability by investors.

Indeed, multiple scholars have articulated definitions and explanations of hope that describe a desire for societal transformation (Bloch and Plaice 1986), to influence the future (Polak 1973), and to persevere through uncertain conditions (Ludema, Wilmot, and Srivastva 1997). The emergence of organizational hope within business plans may arise from a need to justify bold, EO-focused proposals. Innovative, pioneering gambles are being proposed, but their outcome is unknown (Pope 1983). Organizational hope nurtures assurance among stakeholders that pathways exist for the organization to accomplish their risk-laden goals (Youssef and Luthans 2007).

As discussed, from a signaling theoretic perspective, entrepreneurially oriented language does not provide a strong signal capable of differentiating higher and lower quality plans. As such, new ventures may turn to hopeful language to help assuage potential investor concerns that their entrepreneurially oriented plan is sound and can and will come true in the future. Given that highly entrepreneurially oriented ideas are ambitious (e. g. claiming to be the first company to offer space tourism), they are likely to intrigue investors. However, with greater EO, comes increased demand for hopeful expressions to offer assurances that the plan will be successful, and that the venture’s gambles are likely to pay off in terms of increased performance. Thus, we propose that with greater EO, hopeful dialogue is more likely in investor communication.

Hypothesis 2: EO leads to expressions of hope within a venture’s business plan.

Expressions of organizational hope when articulating and crafting business plans may have important implications for how investors evaluate the funding potential of a new venture. While hope can bring about positive results in organizations (e. g. Peterson and Luthans 2003), and support action intended to influence an uncertain future (Ludema, Wilmot, and Srivastva 1997), investors may not perceive these benefits of hope when screening early-stage ventures. Indeed, many descriptions of hope fail to consider the existence, or lack thereof, of supporting evidence that may suggest a justification for hope. This is important given that, as Macquarrie (1978) suggests, hope may not be tied to reality. Waterworth (2004) describes hope as something that is plausible, rather than probable. Thus, we suggest that hope is more akin to, and more likely within, contexts characterized by Knightian uncertainty, or true unknowns, vs. probable, quantifiable risks (Knight 1921). In this vein, Carlsen, Landsverk Hagen, and Mortensen (2012), describe hope as being open-ended, often absent a truly concrete vision of the future. It seems unlikely that a business plan, which aims to present a convincing path to future success, would be evaluated favorably based on hope of adaptation to uncertainty. As failure is the modal outcome of ventures, the potential for false hope is present and expected (Polivy and Herman 2000).

Thus, although one might expect that being very hopeful would benefit ventures by providing an image that many pathways to success may exist, from a screening perspective the value of hopeful discourse may not be immediately evident to investors. Screening theory suggests that receivers focus on signals linked to vague or unverifiable claims (Sanders and Boivie 2004). As hope is considered to espouse positive feelings in the face of uncertainty and unclear paths to future success (Snyder, Anderson, and Irving 1991; Luthans, Avolio, and Norman 2007), potential investors are likely to reject such signals. Increasing hopeful dialogue may therefore have unintended consequences in business plans given that investors are skeptical of claims and screen documents quickly (Kirsch, Gera, and Goldfarb 2009). There is simply no way to determine if the expressed hope is genuine, or represents “false hope”, which may be more readily considered attempts at deception (Snyder 2002). Indeed, investors generally reject plans with unsupported assumptions (Mason and Harrison 2002).

Overall, we suggest that investors “key in” to the use of hopeful language within business plans as attempts to compellingly discuss possibilities that may, or may not, come true in reality. Investors may therefore prefer that hope is not a large part of the venture’s success equation. If a venture’s plan stresses hope then it may inadvertently, and somewhat counterintuitively, present itself as a longer shot at being successful. We posit that all else being equal, less emphasis on hope-oriented language when business planning may be advantageous to early-stage ventures.

Hypothesis 3: Expressions of hope within a venture’s business plan have a negative impact upon investor evaluations of the business plan.

In practice, investors cannot reward all entrepreneurially oriented business plans that they review. Given the skepticism demanded to screen among plans, a communication strategy based upon hopeful dialogue to assure investors of a ventures entrepreneurially oriented prospects of success may fail to convince investors, and unintentionally fall on deaf ears. A lack of believability of hopeful dialogue may help explain weak past connections between venture’s EO and firm fundability (Cox and Sproul 2015). That is, the need to justify an ambitious, EO-focused plan may give rise to hopeful dialogue which investors unfortunately are likely to find unconvincing, thereby suggesting the potential for a competitive mediation effect.

Along these lines we suggest that previous findings may be incomplete, and expressions of EO within business plans may have a weak effect on funding potential because of a competing mediating effect occurring through increases in hopeful discourse. This suggests that, interesting, bold, and pioneering business ideas may grab the reader’s attention given their entrepreneurial nature but may also cause readers to be more skeptical of specific claims (Holaday, Meltzer, and McCormick 2003; Smith, Harrison, and Mason 2010). Indeed, evaluating potential new venture investment opportunities is a highly complex task. Research suggests that given complex nature of evaluation, it is hardly feasible for judges to employ and apply a fully compensatory assessment model, instead they must rely on heuristics for screening as well as other signals that can be gleaned (Maxwell, Jeffrey, and Levesque 2011). For example, recent research findings suggest that perceived passion (Mitteness, Sudek, and Cardon 2012) and impression management (Parhankangas and Ehrlich 2014) can also influence evaluations of investment opportunities by early-stage investors. Thus, applying the tenants of screening and signaling theory outlined previously, we posit that while an eye-catching, entrepreneurially oriented startup idea may grab investors’ attention, it is through a reliance on hopeful expressions that ventures lose their believability. Formally, we propose:

Hypothesis 4: Expressions of hope within a venture’s business plan negatively mediate the relationship between EO and investor evaluations of the business plan.

Investors have limited time to screen business plans and employ heuristics to guide their interpretation of a plans viability (Chan and Park 2015; Harrison, Mason, and Smith 2015; Maxwell, Jeffrey, and Levesque 2011). A key heuristic employed by investors that may affect how they screen and interpret a plans viability is the presence (or absence) of substantial past financial investment in the venture prior to their request for funding (Sudek 2006). When founders invest their own money into a startup, the result is increased commitment (DeTienne, De Castro, and Shepherd 2008; Yamakawa and Cardon 2017). Moreover, founder financial investment sends a valuable signal to potential investors that they are firmly committed to the venture and its success (Atherton 2012; Frid, Wyman, and Gartner 2015; Prasad, Bruton, and Vozikis 2000).

Not all ventures are willing or able to convince themselves that they should make a substantial investment in an early-stage venture concept. This suggests that founder financial investment will constitute a stronger cue, or signal, from the early-stage venture which may differentiate higher (and lower) quality plans seeking funding. Moving from screening to signaling theory (Bergh et al. 2014), founder financial investment may constitute a factor that generates a separating equilibrium between ventures being screened, one which provides a meaningful proxy for the venture’s unobservable commitment to their start-up, its long-term success, and potential impact on the world. The presence of founder financial investment suggests that hopeful discourse may be more credible and should be taken more seriously as perhaps elaborating on genuine beliefs, and not merely creative prose or wishful fiction.

Thus, we recognize and highlight the important interplay of screening and signaling theory as two sides of the same coin when parties are communicating in uncertain environments with asymmetric information. When assessing ventures’ potential fundability, how dialogue is interpreted during the screening process may change dramatically in the presence of a credible signal. That is, communication effectiveness may depend on whether messages are believable or not through the inclusion of a credible signal such as founder financial investment. We posit:

Hypothesis 5: Founder financial investment within their venture positively moderates the influence of their use of hopeful discourse when business planning on investor impressions of the business plan. In the presence of founder financial investment, hopeful discourse will have a positive effect on investor evaluations of the business plan.

Taken together, we present our full research model within Figure 1.

Figure 1:

Conceptual model of EO, hope, previous investments, and investor evaluations.

Independent Variables. We utilized CATA in order to evaluate our two independent variables, EO and organizational hope. Specifically, a CATA software program, CATScanner, was employed to search each business plan and produce a count of how many times the words from each construct’s dictionary appeared in each business plan. We employ the EO dictionaries created by Short et al. (2010), and refined by McKenny et al. (In press) to measure EO’s core dimensions of innovativeness, proactiveness, and risk taking. We leverage the dictionary developed by McKenny, Short, and Payne (2013) to measure organizational hope with the exception of two words, “innovation” and “innovative”, to ensure full independence of the measures. The removal of these two words did not influence the final organizational hope measure as it had a correlation of 0.99 with the measure of organizational hope that included these two words in the dictionary. The dictionaries for EO and organizational hope are available in Appendix A.

In line with past research, raw word counts were created for each dictionary for each business plan. We added the raw counts for each of the three entrepreneurially oriented dimensions together to capture EO. Finally, we divided each constructs’ raw count by the total number of words in each plan. In effect, this normalized each construct in relation to the length of each plan. After controlling for length, we then multiplied each construct score by 100 to eliminate excessive decimal places and establish scores representing what percent of each plan was written with words evidencing each construct. The EO construct was modeled with this percentage score while the organizational hope construct was modeled using a natural log transformation of the percentage to normalize the score and address a moderate skewness.

Moderating Variable. We examine our moderating variable at two levels of founder financial investment, $5,000 - $49,999 and $50,000 or more. Entrepreneurs were asked “(t)he dollar amount invested in your business to date” with options of “less than $4,999”, “$5,000 - $49,999”, and “$50,000 or more”. Follow-up interviews with each venture confirmed that in all but two cases this investment was chiefly from their own finances. In only two instances additional funding received from angels before the competition augmented the founders’ own investments.

Dependent Variable. We measured investor evaluations of the business plan based on a scale of six items pertaining to fundability, available in Appendix A. For the competition, it is made clear to the judges that these six items are combined in order to create a total score representing the overall funding potential of each business plan. Each judge was tasked with rating each plan on a Likert scale ranging from 1 (disagree) to 5 (agree) across the six criteria. 127 different judges with backgrounds in angel investing or venture capital participated, with some helping each year while other judges could volunteer for only one or two years. A minimum of four judges evaluated each plan and no two plans were subjected to the same judging panel. To facilitate an evaluation of all constructs at the same level of analysis, we aggregated the ratings to obtain an overall funding potential score for each plan. This approach is based on our research question examining venture-level communications. Prior to aggregation, we assessed the funding potential construct in terms of interrater reliability and obtained a ICC(1) score of 0.37 and a ICC(2) score of 0.78, both of which suggest aggregation is appropriate (Chan 1998).

Controls. We control for several considerations in our final model. First, we control for the size of the team submitting the plan to account for the effects of having more than one person working on the business or new venture idea. We also control for the effects of new technology being developed by the team. This was a self-report item that asked the team submitting the plan to identify whether or not their business or idea was actively developing new technology. We control for the writing ability and presentation quality of each plan by asking each judge to rate the plan for overall written presentation on a scale of 1 – 5 in order to control for the written presentation of each plan (grammar, impressions of sophistication, etc.). We also control for the industry of each plan submitted via a self-report item from the entrepreneur submitting the plan. Entrepreneurs had the options of selecting one of the following industries upon submission of their plan: information technology, manufacturing, retail, service, or other. We created four dichotomous variables to use as indicators for the four industry choices. Also, we controlled for the specific year the plan was submitted since data came across three years. Dummy variables were created for the second and third year of submissions. Finally, since both students and members of the public could submit, we added a dichotomous variable of student to assess the effects of those types of submissions.

To test our hypotheses, we utilized SEM via AMOS. First, we validated the basic measurement model for our six-item dependent variable to establish validity and reliability via confirmatory factor analysis. We then examined the potential for multicollinearity but found no evidence of this (no VIF score was above 1.18 for the main IVs or 5.62 for the interaction terms). We next tested hypotheses 1–3 via path analysis by evaluating each regression weight’s significance. We tested hypothesis 4 via bootstrapping and evaluating the indirect effects of the overall model to test for the presence of mediation. Specifically, we followed the recommendations by Shrout and Bolger (2002) and Zhao, Chen, and Lynch (2010) by utilizing AMOS to produce 2,000 bootstrapped samples and evaluating the two-tailed, bias corrected, standardized indirect and direct effects of the relationships between the EO dimension and funding potential. Finally, we tested hypothesis 5 by entering the interaction terms into our final model to evaluate for the presence of any moderation of previous investments on the relationship between organizational hope and funding potential.

Confirmatory Factor Analysis. The results of the confirmatory factor analysis for the funding potential construct confirmed that the dependent variable exhibits good validity and reliability. The measurement model displayed good fit: χ2/DF = 0.742, NFI = 0.997, GFI = 0.994, AGFI = 0.972, CFI = 1.000, RMSEA = 0.000 with five degrees of freedom. Four of a possible 15 error covariance paths were freed based on the nature of the items and the suggestion of better model fit from modification indices (Kline 2011). All standardized regression weight item loadings for the six items are significant and above the prescribed 0.7 cutoff (Kline 2011). Finally, the six-item scale had a Cronbach’s Alpha of 0.95, exceeding the commonly accepted cutoff of 0.7 (Nunnally 1978), as well as the more stringent cutoff of 0.8 (Ping 2004). Based on these results, we accept the dependent variable of funding potential as a valid and reliable instrument.

Hypothesis Testing. Means, standard deviations, and correlations for all constructs in the final model are presented in Table 1. The full path analysis model is presented in Figure 2. Our full model, Model 5 in Table 2, ran with the following fit statistics: χ2/DF = 1.475, NFI = 0.894, GFI = 0.891, AGFI = 0.849, CFI = 0.963, RMSEA = 0.049 with 182 degrees of freedom.

Figure 2:

Path analysis results.

H1 was supported as shown in Table 2 and Figure 2; EO has a positive relationship with funding potential. H2 was also supported as shown in Table 2 and Figure 2; EO also exhibits a positive effect on organizational hope. In total, H1 and H2 paint a clear picture concerning the relationships between EO and organizational hope. There appears to be strong overall support that EO is generally associated with the development of organizational hope along with higher levels of funding potential. Thus, when communicating to investors, entrepreneurs pitching business plans with more EO, something investors’ value as examined in H1, also tend to express their hope that the business plan will be successful. Table 2 and Figure 2 also show the results for H3. We found that organizational hope has a significant negative relationship with funding potential. H3 lends full support to the idea that expressions of organizational hope appear to weaken ventures’ funding potential when scrutinized by investors.

We tested H4 by evaluating the two-tailed, bias corrected, standardized indirect effects of the relationships between EO and the funding potential dependent variable based on 2,000 bootstrapped samples. We tested for the indirect effect through organizational hope alone as it is the only variable creating an indirect path from EO to funding potential. Results indicate that EO has a significant negative indirect effect on funding potential through organizational hope at the p < 0.01 level. Further, as shown by both Models 3, 4, and 5 in Table 2, EO has a positive significant relationship with funding potential even with the mediator of organizational hope is present. In accordance with Zhao, Chen, and Lynch (2010, pg. 201), we can conclude that the relationships between EO, organizational hope, and funding potential exhibit competitive mediation. We reach this conclusion based first on the significance of the indirect effect above, and second, on our results displayed in Figure 2 that show the positive and significant relationship that EO has with hope and funding potential while hope simultaneously has a negative and significant relationship with funding potential. This type of mediation suggests that there may be another theoretical mediator that may be identified in future research to further strengthen the hypothesized model.

Finally, we test H5 by evaluating Model 5 in Table 2. We found support for both H5a and H5b. Specifically, the effect of founder financial investment dampens the significant negative relationship between organizational hope and funding potential at both levels of founder investment we investigated. In order to visualize these effects, we have plotted the results utilizing the unstandardized regression weights of two models that only contained one of the moderating variables at a time. These visualizations are presented in Figure 3 and Figure 4. Based on these visualizations, along with the standardized effects from Model 5 in Table 2, a larger previous investment has a greater effect of dampening the negative relationship between organizational hope and funding potential. However, in terms of both levels of previous investments, having these investments present are enough to turn the strong negative relationship between organizational hope and funding potential into a non-existent or even slightly positive relationship.

Figure 3:

$5,000–$49,999 moderating effect on the relationship between organizational hope and investor evaluations.

Figure 4:

$50,000 moderating effect on the relationship between organizational hope and investor evaluations.

In total, these findings show that the relationship between EO and funding potential is negatively mediated by organizational hope, while the relationship between organizational hope and funding potential is positively moderated by the presence of previous investments.¹ These findings suggest that expressions of EO in a business plan are good for the plan’s chances of being evaluated positively by potential investors. However, EO also tends to cause expressions of organizational hope to be manifest in the plan that investors do not inherently view favorably. This negative relationship between organizational hope and funding potential can be mitigated if the venture evidences financial commitment and “skin in the game”.

In terms of additional future research areas, our study examines the moderating role of founder financial investment, however, question remains if the results hold when the investment is from other sources such as previous grants, competitions, debt financing via banks, or equity financing via angel investors. Potential nuance to the study findings is possible as other investment sources may be similarly consequential. It is possible that past investment from other investors, such as angels, etc., may accentuate a band-wagon effect in which the judges more favorably screen a plan. Moreover, how do the relationships hold across different types of investment? It may also be interesting to consider how the results could change when moving from an early to later stage investment context. In later stages, is hope more beneficial? Does founder financial investment take a back seat to expectations of investments from other angels? Investor backgrounds may also be worthy of greater consideration in future research, as having a particular background may affect what the investor judge considers relevant, important, and a useful screening heuristic. We offer these questions for future research.

As for the efficacy of business plan competitions as a screening mechanism for future venture success, the literature is not particularly clear in this regard, lacking the necessary long-term studies to convincingly demonstrate their ability to predict future high growth ventures. It is our hope that additional research will provide greater insight into competition judges as efficacious harbingers of venture’s long-term prospects. This relationship may also be examined in terms of a self-fulfilling prophecy as winning a business plan competition signals greater potential for success to a wide variety of relevant organizational stakeholder groups.

Within the hope literature, we identify a highly relevant entrepreneurial context in which hope, in a communicative form, can have negative or detrimental implications. This is in contrast to the positive implications that organizational hope has often been associated with (e. g. Avey et al. 2011). Our results suggest that key contexts and instances exist in which hopeful dialogue may have unintended implications when interpreted within appeals to judges, such as investors, that have yet to be identified or considered. We believe that future research will also benefit from the continued utilization of the CATA methodology when assessing various types of formal and informal communications that early-stage ventures prepare while moving through the entrepreneurial process. For example, similar analyses can be applied to venture’s websites, social media, award applications, and internal communications.

Finally, practitioners should communicate their anticipated entrepreneurial plans with some caution. That is, entrepreneurs would be wise to recognize that their early-stage startup context, characterized by considerable uncertainty and lofty expectations, unassumingly leads to hopeful expressions as ventures propose highly entrepreneurial actions. Given investor skepticism, if the firm is unwilling, or unable, to make a substantial financial investment in their venture before seeking investor approval, such hopeful discourse is likely to fall on deaf ears.