Sharing Stories About Venture Creation : How Crowdfunding Audiences React to Experimentation and Planning in Entrepreneurial Narratives

Early-stage entrepreneurs must mobilize resources and support to develop their business. Our study focuses on how narratives related to experimentation and planning affect success in mobilizing resources. Using data from a leading crowdfunding platform and two online experiments, we find that novice entrepreneurs – those who lack prior experience on the platform – who describe an experimental strategy for developing their venture are more likely to raise funds than others, but this positive effect goes away with experience. On the other hand, planning narratives are beneficial for both novice and experienced entrepreneurs, and even increase their impact for experienced entrepreneurs. Through this study, we show that narratives including the “how” of venture creation – experimentation and planning – are valued by important audiences, but that their effect depends on the experience of the entrepreneur in different ways. With the growing emphasis among entrepreneurs on experimentation and lean start-up techniques, this research clarifies the contingent ways in which narratives about these activities can help nascent entrepreneurs gain access to resources as well as the risk they carry for those with more experience