TO BE, OR NOT TO BE FUNNY? THE DOUBLE-EDGED NATURE OF ENTREPRENEUR HUMOR EXPRESSION IN EQUITY-BASED CROWDFUNDING

Abstract

Humor is omnipresent in our daily interactions. However, we know surprisingly little about how potential investors react to entrepreneurs who use humor during fundraising, a critical stage of the entrepreneurial process. I draw upon language expectancy theory and recent crowdfunding research to hypothesize that entrepreneur humor expression is positively related to investors’ willingness to invest via perceived source credibility. Further, I hypothesize that an entrepreneur’s sex and race moderate the positive relationship between entrepreneur humor expression and perceived source credibility. Specifically, the relationship will be weaker for female and minority entrepreneurs. Findings indicate that entrepreneur humor expression is significantly related to investors’ willingness to invest. However, post-hoc analyses and qualitative insights reveal humor is a “double-edged sword” by which entrepreneurs can strengthen or destroy their budding relationship with potential investors. This dissertation contributes to the literature by expanding our understanding of the different communication tools entrepreneurs can utilize during fundraising. I shed light on the pros and cons of using humor with potential investors and address potentially bias reactions to humor that compromise investor decision making.