Shared mental models: a new approach to understanding entrepreneurs’ and investors’ representations

ABSTRACTThe literature on venture-capital investment and entrepreneurship has demonstrated the important role played by mental representations in the entrepreneur – investor relationship. This research draws on shared mental model (SMM) theory to structure a comparative analysis of investor and entrepreneur representations regarding success and the factors that influence it. Through 16 interviews conducted with four entrepreneur – investor pairs, we highlight the need to study representations in greater depth in order to identify potential misalignments. We demonstrate the relevance of SMMs and the use of cognitive maps in capturing and comparing actors' representations through multi-level and multi-approach analysis.KEYWORDS: Shared mental modelsentrepreneur–investor relationshipcognitive mappingentrepreneur's and investor's representations Disclosure statementNo potential conflict of interest was reported by the author(s).Notes1. Series A is the stage that comes once the startup has found its product – market fit. In this stage, the startup is focused on growth and commercial aspects. This is often the second round of fundraising (Source: Corporate finance institute).2. Both pairs that are refinancing for a second round have changed their investor interlocutor. In the first case, the investor interviewed replaced the previous one during fundraising in 2017. In the second case, the investor interviewed ceded their place to another representative of the investment fund in December 2021 as a new fundraising round began.3. This sub-dimension refers to external elements and stakeholders.