Entrepreneurs’ Activities on Social Media and Venture Financing

Abstract

Social media has been an incredible platform for startups to develop meaningful connections with stakeholders and customers. We investigate ways in which entrepreneurs use social media to drive both the level of engagement for their startup and the subsequent level of venture financing. Our empirical analysis demonstrates how differences in entrepreneurs’ tweets—i.e., differences in the level informativity, persuasiveness, and transformativity—is associated with different levels of startup engagement and venture financing. We show differences in entrepreneurs’ activity with the social media platform—i.e., the number of tweets, the number of mentions of other accounts, and the number of retweets—further drives engagement and venture financing. We test our model by collecting an extensive dataset of over 7,000,000 tweets from entrepreneurs and startups that have been through accelerators. Results indicate associates between the social media activities of entrepreneurs, startup engagement, and venture financing.