Do Disruptive Visions Pay Off? The Impact of Disruptive Framing on Venture Funding.

We investigate whether framing an entrepreneurial vision in a disruptive way helps or hampers subsequent investment acquisition. Disruptive framing of entrepreneurial visions refers to the promotion of an interruption or displacement of an existing technology, service, or business model. We contrast this with achievement framing, which communicates previous and current achievements. Drawing from real options theory, we hypothesize that disruptive framing increases the likelihood of getting funded, but attracts fewer amounts. These effects are exacerbated by achievement framing. A novel dataset of Israeli start- ups shows that a standard deviation increase in disruptive vision communication increases the odds of getting funded by 14 percent, but reduces amounts of funds received by 36 percent. In addition, achievement framing complements disruptive framing in the odds of receiving funding, but substitutes it in the amount of funds received. These findings offer new insights on how entrepreneurs frame their innovations in the disruption process.