Convincing investors: The complex and evolving interplay of signals and narratives

We explore how new ventures at different stages of development integrate their vision of the uncertain future with past achievements to convince investors. Using Qualitative Comparative Analysis, we analyze a sample of new ventures on a leading UK-based equity crowdfunding platform, considering configurations of novelty, specific, and coherent narratives, and human, social, and intellectual capital signals. We find intricate configurational patterns and identify four convincing strategies: Certified Scientist and Certified Craftsman for pre-market ventures with novelty positioning, Validated Visionary for post-market ventures with novelty positioning, and Embraced Achiever for post-market ventures without novelty positioning. Our findings extend research on entrepreneurial narratives, signaling theory, and entrepreneurial finance with contingent and configurational insights, showing that signals and narratives can complement or substitute each other, with their performance implication heavily dependent on the stages of new ventures and the exact composition of configurations.