Does Entrepreneurial 'Storytelling' Affect Startup 'Fundraising'?

Abstract

To reveal the relationship between "storytelling" and "financing", this study replicates Martens's (2007) paper, which analyzed the prospectuses of 168 companies in the biotechnology, semiconductor, and Internet service provider industries listed on the U.S. securities markets during the five-year period from 1995-2000. This study used data from 95 companies in the "information and telecommunications sector" listed on the TSE Mothers or JASDAQ during the four-year period 2016-2019 to determine whether the same argument holds true for the Japanese market. Results of this research partially support the hypothesis that the "identity" constructed for the firm in the entrepreneur's narrative influences the acquisition of external resources "more than the factual asset information". The results of this follow-up study suggest that the effect of communicating "identity" through entrepreneurial "storytelling" may have an impact on "funding" for startups.