Drawing on impression management and social exchange theory, we examine the use of positively biased forecasts by (non-)founder-CEOs as an impression management tactic vis-`
a-vis their
existing investors. Contrary to their non-founder counterparts, founder-CEOs identify more with
the venture they founded and, therefore, experience ...
Drawing on impression management and social exchange theory, we examine the use of positively biased forecasts by (non-)founder-CEOs as an impression management tactic vis-`
a-vis their
existing investors. Contrary to their non-founder counterparts, founder-CEOs identify more with
the venture they founded and, therefore, experience greater instrumental and affective concerns
about the long-term relationship with their investors. Consequently, we hypothesize that founder CEOs will strategically provide less positively biased forecasts to their investors than non-founder CEOs. Using two independent samples with revenue forecasts reported to different venture capital
investors and a causal chain scenario study consisting of two experiments, we find consistent
support for our hypothesis. Overall, this study provides new insights into the use of forecasts as a
post-investment impression management tactic by distinct types of CEOs in entrepreneurial
ventures.