Jens Schmidt and I also work on a project that zooms into the micro-foundations of persuasion with theories. The idea is that both a sender (like a founder team) and a receiver (like a VC) think in theories. When will sending a subtheory of the founder's theory persuade the VC to fund the project? Using formal modelling, we show that theories interact logically, and that subtheories of the founder's theory can act like "puzzle pieces" and complete an incomplete theory of the VC of why funding the project may be of value for the VC. Our central result is the Filter Condition: Some subtheories of the founders would lead to persuasion, as they indeed complete a theory of value in the VC's mind, but they also complete an incomplete "filter theory", a theory of why funding is not a good idea. For instance, if the missing puzzle piece for Airbnb's funders is a solution to the problem of trust between hosts and guests, and the founders propose insurance of the hosts, that may work in principle but activate the funder's filter: They may have the theory that they only fund Internet companies with diminishing marginal cost when the company is scaled, and cost for insurance would lead to significant marginal costs of extra listings.
Winner of a 2022 Distinguished Paper Award at the Academy of Management.
Revise and Resubmit at the Strategic Entrepreneurship Journal.