Management Forecast Characteristics: Effects on Venture Capital Investment Screening Judgments

Fleming, Damon M.
June 2009
Behavioral Research in Accounting;2009, Vol. 21 Issue 2, p13
Academic Journal
This study examines the effects of the quantification and precision of forecast disclosures in new venture proposals on 62 experienced venture capitalists' initial investment screening judgments. It was predicted that including quantitative estimates for key components of earnings forecasts in the proposal enhances its persuasive power and, thus, more favorable investment screening judgments. It was also predicted that while quantification can increase the persuasive power of forecast disclosures, it may also evoke expectancies about forecast precision and that violation of these expectancies adversely affects investment screening judgments. Experimental results generally support the research predictions and additional analyses reveal that perceptions of management's credibility mediate the main effect of forecast quantification. Combined, these results provide evidence that managers should carefully consider the information content and consistency of forecast disclosures.


Related Articles

  • LIES VENTURE CAPITALISTS TELL ENTREPRENEURS. Anderson, Howard // Network World;09/25/2000, Vol. 17 Issue 39, p99 

    Reveals the lies venture capitalists tell entrepreneurs. Interpretation of various sentences; 'Our money is different'; 'We are sending in the term sheet-sign it, and we're on our way'; 'There is no need for us to sign a nondisclosure agreement.'

  • LIES, DAMN LIES AND MARKETING LIES: WELCOME TO MY WORLD. Anderson, Howard // Network World;08/07/2000, Vol. 17 Issue 32, p41 

    Comments on marketing facts most commonly misrepresented by Internet companies searching for venture capital. Inclusion of market projections; False statements about selling the product or service to a major company; Plans regarding initial public offerings; Repositioning of failing...

  • Build Credibility. Benzel, David // Leadership Excellence Essentials;Jan2008, Vol. 25 Issue 1, p14 

    The article focuses on how leaders can build credibility and demonstrate genuineness. Celebrating the accomplishments of others means honoring them and this in turn will help others see your value and honor you. It is imperative that one become a learner and continue asking questions and...

  • US, European Venture Markets Shrink While China, India and Brazil Expand. Gallagher, Matt // Red Herring;8/3/2010, p2 

    The article provides information on the results of the 2010 Global Venture Capital Survey by international accounting and consulting firm Deloitte and the National Venture Capital Association. The study showed that the venture capital markets of China, Brazil, and India are expected to flourish,...

  • Midwestern health investment could reach $1B by year's end. Ford, Omar // Medical Device Daily;7/25/2007, Vol. 11 Issue 140, p1 

    The article reports on a forecast on Midwestern health investment that is expected to reach $1 billion by the end of 2007. It is stated that 62% of the total investments is made up of biopharmaceuticals. Ohio is said to be the top healthcare venture capital attraction investment with ventures...

  • SEMANTIC CONFUSION IN ATTITUDE RESEARCH: SALIENCE VS. IMPORTANCE VS. DETERMINANCE. Myers, James H.; Alpert, Mark I. // Advances in Consumer Research;1977, Vol. 4 Issue 1, p106 

    Salience, importance, and determinance have often been incorrectly used in attitude research, with consequent confusion and lowered explanatory power in several studies. This paper is written to clarify these key concepts, compare their predictive validity, and suggest methods for dealing with...

  • Testing Measures of Equity Sensitivity for Resistance to Response Distortion. Liguori, Eric W.; Taylor, Shannon G.; Sungwon Choi; Kluemper, Donald H.; Sauley, Kerry S. // Journal of Managerial Issues;Spring2011, Vol. 23 Issue 1, p46 

    Equity sensitivity research has struggled to accumulate a coherent body of findings consistent with equity theory tenets, due in part to problems concerning the construct's measurement. Inaccurately measuring one's equity preferences may affect the validity of predictions made from distorted...

  • If you get a cold call from a broker. Weber, Diane // Medical Economics;5/23/2003, Vol. 80 Issue 10, p40 

    Provides tips on making a deal with investment brokers. Assessment on the rate of returns; Details on the credibility of the brokers; Type of business.

  • DECLINE OF THE PROFIT PROPHETS. Goldsmith, Jill; DiOrio, Carl // Variety;4/15/2002, Vol. 386 Issue 9, p1 

    Deals with the credibility issue surrounding financial analysts in the U.S.. Implications of government scrutiny among analysts for the investment business; Shortcomings of analysts in the entertainment field; Analysts who made a career change.


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics