Advanced Economic Seminars 319: Neural Alignment Between Entrepreneurs and Informal Investors During Live Elevator Pitches

Topic: Neural Alignment Between Entrepreneurs and Informal Investors During Live Elevator Pitches

Lecturer: Assistant Prof.Tao Liu, School of Management，Shanghai University

Time: 9:30 a.m. July 22th, 2023

Venue: B609 Yifun Building, Central Campus

Abstract: We investigate the cognitive mechanism underlying informal investors' initial decision during live elevator pitches. Using a functional near-infrared-spectroscopy-based hyper scanning technique, we simultaneously measured brain activations of pairs of entrepreneurs and informal investors during venture pitches. Consistent with fluency theory, informal investors were more likely to invest in pitches that evoked lower levels of cognitive load. Inter-brain neural alignment (INA) between entrepreneurs and informal investors, indicating mutual understanding and consensus, contributed to the informal investors' interest. Informal investors tended to invest in pitches that evoked higher INA during the initial introduction of the pitch. Our paper suggests that entrepreneurs should monitor their social environment and adjust their mindset to ensure that they deliver their opinions in accordance with informal investors’ expectations, thus reducing the difficulty of understanding and promoting mutual understanding with informal investors, especially in the initial stage of pitching.