Entrepreneurs’ facial expressions & emotional contagion during investor pitches

Entrepreneurs’ facial expressions & emotional contagion during investor pitches

Posted by Guest Blogger on Thu 02 Sep. 2021 - 5 minute read

This blog post was written by two guest bloggers: Daan Dinkla and Werner Liebregts from Tilburg University, the Netherlands.

Raising funding is crucial for most startups to realize their growth ambitions and become successful. Convincing investors to fund your startup can be difficult as large information asymmetries exist. Investors are typically generalists and the entrepreneurs usually know more about their startup, motivation, commitment and target market than they do.

Therefore, investors partly rely on signals provided by the entrepreneur to reduce this asymmetry. These signals consist of concrete actions like the entrepreneur committing personal wealth, but also certain emotions displayed by the entrepreneur like passion or joy for solving a problem are shown to help convince investors.

Investigating mechanisms behind emotions

This might sound like a familiar topic to you. A few months ago, the blog post: “The role of entrepreneurs’ facial expressions to gain financial support” on this medium was written about the display of positive emotions by entrepreneurs during their pitches and the effect these emotions have on attracting funding. That blog was based on academic research by Jiang, Yin and Liu (2019).

This new blog post describes recent research by Daan Dinkla under the supervision of Werner Liebregts, who both are authors of the current blog. They replicated the work by Jiang et al. (2019) using a different sample of (student) entrepreneurs and professional investors in a different context, and investigated the mechanisms behind the emotional effects using FaceReader.

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Peak moments of experienced emotions

Like Jiang et al. (2019), Dinkla and Liebregts looked at a specific moment of displaying positive emotions, namely the peak intensity. Why peak intensity? When evaluating and summarizing an event retrospectively, not every moment is equally important; people are shown to rely most on peak moments of experienced emotions during that event.

Through emotional contagion, a process by which people automatically mimic and subsequently ‘catch’ the emotions of others they are interacting with, investors are thought to reach this peak emotional state at the time when the displayed emotion by the entrepreneur is at its peak level. The entrepreneur is thus thought to ‘infect’ the audience with their displayed emotions. The research by Jiang et al. (2019) showed support for a positive relation between the peak intensity of displayed joy and the amount of funding Kickstarter entrepreneurs raised.

However, the process of emotional contagion is still a black box in contemporary entrepreneurship research. It is assumed to happen during pitches, but no research has actually verified whether contagion really takes place. Dinkla and Liebregts are the first to evaluate this mechanism behind the effect of displaying joy on pitch success.

Emotional contagion during investor pitches

They do this by investigating the first step in the contagion process, which is emotional mimicry. They specifically test whether or not immediately after the peak intensity of displayed joy by the entrepreneurs, displayed joy levels of the investors rise above a certain significance level as well. This would indicate that investors indeed mimic the happiness that entrepreneurs display. This mimicry can then potentially lead to emotional contagion.

Video recording behaviors during pitches

How were the effects measured in their replication study? Student entrepreneurs pitched their business ideas during a pitch competition in front of three professional investors (VCs and BAs). For the pitch success measure, investors were asked to indicate how willing they were to invest in the startup pitched by the students.

Both the students and the investors were video recorded during the pitch. Their facial expressions were analyzed using FaceReader, a software program for facial expression analysis by Noldus Information Technology. FaceReader is trained to classify facial expressions into one of the six basic emotions (happy, sad, angry, surprised, scared, disgusted) or a neutral state using artificial intelligence (AI).

Facial action units indicate the expression

Facial expressions are classified into emotions by looking at facial action units, these are the smallest visually discriminable facial movements. The co-occurrence of some of these action units indicates the expression of a certain emotion.

Joy is for example characterized by the presence of two action units, lip corner puller and cheek raiser. The FaceReader software package is one of the most scientifically validated automated facial recognition programs and is shown to be of similar, or even better, accuracy as human coders (Lewinski, den Uyl & Butler, 2014). FaceReader allowed Dinkla and Liebregts to classify movement of facial muscles (action units) into emotions automatically for each frame of every video.

Download here the FREE white paper 'Facial Action Coding System (FACS)'

Pitching experiment FaceReader Dinkla and Liebregts

Does emotional mimicry lead to an investment?

So what effects of displaying joy were found? Dinkla and Liebregts found support for the hypothesis that occurrence of emotional mimicry is related to peak joy. In other words, emotional mimicry is more likely to happen if the intensity of joy displayed by the entrepreneur is higher. An effect of this mimicry on the willingness to invest is absent, however. There is no significant relationship between mimicking the emotion of the entrepreneur by the investor and their willingness to invest.

Possible explanations for this non-result are that investors are able to cancel out their emotional state and mainly focus on other, possibly more concrete, aspects of the pitch to make an investment decision. Or possibly investors mimic the entrepreneur subconsciously but this mimicry does not lead to contagion; academic research has shown that mimicry does not always lead to emotional contagion.

The influence of emotions in a decision making process

Dinkla and Liebregts also find in their replication study that an entrepreneur displaying joy has a negative effect on the willingness to invest of the investors in the audience. Interestingly, this is the opposite effect found by Jiang et al. (2019). Those authors find displaying joy has a positive effect on the amount of funding raised by the entrepreneur on Kickstarter.

What might be the cause of this difference in effects? Well, there are a few differences between both studies. Most importantly, Dinkla and Liebregts focus on students pitching to professional investors, while Jiang et al. (2019) study (non-live) pitch videos on Kickstarter.

Differences might exist between how much the different types of audiences (professional vs. mostly consumers) rely on or are influenced by emotions in their decision making process. Results on the effect of displaying emotions during pitches are thus not conclusive yet. Future research hopefully identifies when and how exactly emotions influence the outcome of a pitch in greater detail.


Jiang, L., Yin, D., & Liu, D. (2019). Can joy buy you money? The impact of the strength, duration, and phases of an entrepreneur’s peak displayed joy on funding performance. Academy of Management Journal, 62(6), 1848-1871.

Lewinski, P., den Uyl, T. M., & Butler, C. (2014). Automated facial coding: validation of basic emotions and FACS AUs in FaceReader. Journal of Neuroscience, Psychology, and Economics, 7(4), 227.

For more information please contact 

Dr. Werner Liebregts
[email protected]

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