Sounds Novel or Familiar? Entrepreneurial Ventures’ Framing Strategy in the Venture Capital Market

In this study, we examine the impact of entrepreneurial ventures’ linguistic operation on their resource acquisition endeavor in the venture capital (VC) market. Tying framing theory in sociology to the study of VC, we ask the research question: how will an entrepreneurial venture’s use of novelty and familiarity frames influence its success in attracting independent VCs (IVCs) and corporate VCs (CVCs)? We develop five hypotheses to distinguish the differential impacts of distinct frames on specific types of VCs, tested based on a dataset composed of 2,972 entrepreneurial ventures founded during the years 2003-2012. We found that the use of novelty frames by entrepreneurial ventures positively affected the number of IVCs and CVCs they attracted in an investment round. We also found that this positive impact was stronger for CVCs than for IVCs. In contrast, while the use of familiarity frames by entrepreneurial ventures was negatively associated with the number of CVCs they attracted in an investment round...