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The sandwich game: Founder-CEOs and forecasting as impression management
Collewaert, Veroniek Vanacker, Tom Anseel, Frederik Bourgois, Dries
Collewaert, Veroniek
Vanacker, Tom
Anseel, Frederik
Bourgois, Dries
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Publication Type
Journal article with impact factor
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Supervisor
Publication Year
2021
Journal
Journal of Business Venturing
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Publication Volume
36
Publication Issue
1
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Abstract
Drawing on impression management and social exchange theory, we examine the use of positively biased forecasts by (non-)founder-CEOs as an impression management tactic vis-à-vis their existing investors. Contrary to their non-founder counterparts, founder-CEOs identify more with the venture they founded and, therefore, experience greater instrumental and affective concerns about the long-term relationship with their investors. Consequently, we hypothesize that founder-CEOs will strategically provide less positively biased forecasts to their investors than non-founder-CEOs. Using two independent samples with revenue forecasts reported to different venture capital investors and a causal chain scenario study consisting of two experiments, we find consistent support for our hypothesis. Overall, this study provides new insights into the use of forecasts as a post-investment impression management tactic by distinct types of CEOs in entrepreneurial ventures.
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Keywords
Forecasts, Venture Capital, Founder, Impression Management, Social Exchange Theory