Capitalizing the future: opportunity capital as symbolic significance of an entrepreneur’s future-venture story

ABSTRACT

This paper explores how a future – as something that can only be imagined but can inspire entrepreneurial action – can attract economic capital. We integrate Dor’s (2015) model of language as a communication technology for the instruction of imagination with Bourdieu’s theory of practice to account for how an entrepreneur’s words can hold sway over an investor by virtue of meaning something significant. We introduce opportunity capital as the symbolic significance of the entrepreneur’s future-venture story and the exchange counterparty to the investor’s economic capital. Our portrayal of the future as a symbolic phenomenon inducing action by others offers foundational insights to research on the early stages of venturing and the acquisition of resources by entrepreneurs.

KEYWORDS:

• Language
• instructive communication
• opportunity
• resource acquisition
• entrepreneur
• legitimacy
• future

“We think you can draw a 2 × 2 matrix for venture capital. … And on one axis you could say, consensus versus non-consensus. And on the other axis you can say, successful or failure. And of course, you make all your money on successful and non-consensus. … it’s very hard to make money on successful and consensus … And let me translate “non-consensus”: in sort of practical terms, it translates to crazy. You are investing in things that look like they are just nuts”. Marc Andreessen¹

It is 2007. Drew Houston submits a funding application to Y Combinator for Dropbox, described as something that ‘synchronizes files across your/your team’s computers’.² What he is talking about – something named ‘Dropbox’ – does not exist, even though the idea of it does (in Drew Houston’s mind) and it can be described. Although many objects could fit the given description, this particular one (Dropbox) is about to receive $15k in funding from the Y Combinator and $1.25 m in venture capital funding a few months later. Dropbox does not yet exist, but because of being funded, it will. We could say that Dropbox – the thing named ‘Dropbox’ – is something imaginary at first but later real.

This scenario zooms in on a core issue in entrepreneurship research – how future goods or services come into existence (Venkataraman 1997) – and raises deeper questions, about which entrepreneurship research has been largely silent. What does a future good/service (such as Dropbox in 2007) refer to? What is it that investors are buying when nothing yet exists but the talk of entrepreneurs? Some scholars speak of something (an idea) that entrepreneurs have in mind (Davidsson, Grégoire, and Lex 2021; Dimov 2020), while others speak of stories that entrepreneurs tell (Clarke, Cornelissen, and Healey 2019; Lounsbury and Glynn 2001). Yet, investors are not buying ideas or stories. They are buying into the object of an idea or a story – a certain future – as something external to both minds and language,³ yet apprehensible only through them at the start. How can a future be capitalized?

In this paper, we seek to understand how a future – as something that can only be imagined but can inspire entrepreneurial action – can attract economic capital. We anchor our account in Dor’s (2015) model of language as a socially constructed communication technology dedicated to the instruction of imagination in others. The premise of this model is that language enables the communication of what is experientially incommunicable. To account for the sociality in which a future can become a significant symbol between the communicating parties (Mead 1932), we discuss the extra-linguistic social order that underpins communication, using Bourdieu’s constructs of field, habitus, and capital (Bourdieu and Wacquant 1992). The culmination of our model is the notion of opportunity capital as a symbolic value of the entrepreneur’s effort and, thus, the exchange counterparty to the investor’s economic capital. On the imaginary scales of the entrepreneur-investor exchange, the ‘weight’ of the investor’s economic capital on one side is balanced with the (symbolic) ‘weight’ of opportunity capital on the other side.

Our portrayal of the future as a symbolic phenomenon offers foundational insights to research focused on the early stages of venturing and the acquisition of resources by entrepreneurs. We provide a socio-linguistic account of what entrepreneurs pursue and how it can be deemed significant. This account is holistic, incorporating the active role of the investor and highlighting how investor- and entrepreneur-specific cultural and symbolic capital combine into a calibrated conception of a future venture. Our model thus helps close the gap between legitimacy and commitment, i.e. between desirable and desired. Beyond perceiving a future venture story as legitimate, investors commit to making it real.

The paper is structured as follows. In the next two sections, we provide a guiding framework and introduce Dor’s model of language communication. Next, we introduce Bourdieu’s theory of practice to understand how the words of the entrepreneur can hold sway over the investor by virtue of meaning something significant in a given social context. This culminates with the introduction of the concept of opportunity capital as the symbolic significance of the entrepreneur’s future-venture story. Finally, we discuss the contributions and future research implications of our model.

Future-venture stories

Entrepreneurs often imagine ventures that push beyond the boundaries of the known and familiar, and thus their evaluation beyond reason (Knight 1921). When investors such as venture capitalists back such bold entrepreneurs, they embrace unknowable risks with the hope of coming upon ‘diamonds in the rough’ (Huang and Pearce 2015). At the same time, the prospect of committing resources to the pursuit of ‘crazy’ ventures prompts one to look for signs that they are realistic. This raises considerations of imagination and communication.

The future ventures that entrepreneurs think about and set out to pursue are imaginary.⁴ Entrepreneurs use their imaginations to conceive and describe different, possible worlds (Rindova and Martins 2021) as a form of fantasy (Roundy 2021). Such worlds are fictional in that they do not contain assertible facts but use contingent imaginaries that convey a sense of the future as a realm that could be shaped through deliberate action (Beckert 2016). Thus, a venture idea is ‘an “imagined future venture”; i.e. an imaginary combination of product/service offering, markets, and means of bringing the offering into existence’ (Davidsson 2015, 683). This imaginary object of entrepreneurial aspirations is constituted by mental representations and expressed through language or other symbols (Dimov 2020).

Entrepreneurs use stories to make the objects of their aspirations familiar, understandable, and legitimate (Lounsbury and Glynn 2001). To be able to speak about their inner thoughts and imaginations, entrepreneurs configure them into the demands of spoken language by deploying analogies and metaphors to create basic images of their venture as discursive objects (Cornelissen and Clarke 2010; Hill and Levenhagen 1995). Entrepreneurs aim to project certain end states and shape investor expectations and evaluations (Garud, Schildt, and Lant 2014), deploying non-verbal gestures and figurative language that prompt investors to imagine the ventures and thus experience and understand their nature and impact (Clarke, Cornelissen, and Healey 2019). More broadly, through their narratives, entrepreneurs perform symbolic actions to draw the investors’ attention to categories of broader meaning, such as credibility, professionalism, achievements, and relationships (Zott and Huy 2007).

When an entrepreneur speaks to us, they effectively tell us a future-venture story, i.e. a story about an imaginary, not-yet-existing venture. Even though the venture is something not yet existing, there are two aspects of familiarity vs novelty that we can distinguish in such a story, as illustrated in Figure 1. The first aspect is what the story is about – its object – and relates to whether we (as the listeners) have a familiar, concrete sense of the type of object it is. For instance, a story about a restaurant would strike us as more familiar than a story about a satellite-based manufacturing facility. This distinction is represented by the filling (grey vs blank) of the ovals. Thus, ovals 1 and 2 capture more familiar objects (grey filling) in the sense that we know such things, while ovals 3 and 4 refer to novel objects (blank filling) in that we have no concrete understanding of them. The second aspect is the description of the object and relates to whether the pertinent information it conveys about the object coheres with our general understanding of objects. For instance, a story about a coffee shop with a serving bar and seats is more familiar than the one about a coffee shop with roving self-driving coffee machines. This distinction is represented by the contour (solid vs dashed) of the ovals in the figure. Thus, ovals 1 and 3 capture familiar descriptions (solid contour), while ovals 2 and 4 stand for novel descriptions (dashed contour).

Figure 1. Object and description in a future-venture story.

When they pitch to investors, entrepreneurs aim to tell realistic stories about imaginary, not-yet-real ventures. Indeed, what the stories are about, in a literal sense, are products that do not yet exist, customers that do not yet buy, sales and profits that have not yet taken place, markets that have not yet been conquered, and organizations that have not yet been built. Like fiction writers, entrepreneurs talk about imaginary things. But unlike fiction writers, they aim to make the imaginary real and are the protagonists in this process. Among the archetypal stories in Figure 1, story 1 is the most prosaic and thus realistic, and story 4 is the most fantastic and thus unrealistic.

Stories 2 and 3 can be deemed realistic in revelatory and metaphoric senses (Goodman 1983). Revelation arises from a new description that enables us to appreciate novel or hitherto hidden or unnoticed aspects of familiar objects. For instance, having found paying guests for their inflatable mattresses, Brian Chesky and Joe Gebbia began to describe such mundane items as things that can be rented out and called this service ‘Air Bed and Breakfast’. A metaphorical sense of realistic arises from the sense that, although Don Quixote describes no one when taken literally, it describes many of us when taken metaphorically: ‘A fictional story is realistic in a third way, then, to the extent that it is a real-object story, though, of course, it is not a story of any real objects’ (Goodman 1983, 271). For example, in an early video,⁵ Dropbox was described as ‘a magic pocket. Putting something in a magic pocket means it is always there, no matter what you wear and no matter where you are’. This suggests that fantastic future-venture stories can be made more realistic when they move towards familiar descriptions (solidifying the contour) or towards familiar objects (filling in the blank).

When a venture capitalist invests in a seed-stage venture – which is typically not much more than a vision that an entrepreneur articulates of what they aim to achieve in the future (indeed, often described as a person with a PowerPoint deck) – the investor’s capital is traded for a stake in an imaginary future venture. Unlike the value of money, the value of the future venture is harder to pin down. The same venture pitched by the same entrepreneur to two different investors would vary in its perceived value. Similarly, the same venture pitched by two different entrepreneurs to the same investor would also generate different perceived values. Different ventures pitched by the same entrepreneur to the same investor would also vary in perceived value. And even the same venture pitched by the same entrepreneur to the same investor but in a different context might be evaluated differently. Therefore, the value of the future venture implicates the entrepreneur as a speaker, the investor as a listener, and the communication between the two as being about a future venture, all situated in a particular social context.

This holistic nature of the communicative interaction between entrepreneur and investor is illustrated in Figure 2 below. We draw a distinction between the two-way communication between entrepreneur and investor (1) – that is, the entrepreneur’s pitch and ensuing dialogue – and what the communication is about, that is something imaginary that can be categorized and described in different ways.

Figure 2. Communicative interaction between entrepreneur and investor.

The three interfaces are clearly intertwined. How an entrepreneur sees and evaluates a venture (2) is affected by the story they tell and how the investor reacts. The story the entrepreneur delivers is affected by how they see the venture and how the investor reacts. And how the investor reacts to a venture (3) reflects how the entrepreneur sees the venture and the story they tell. We can, therefore, see the dialogue between entrepreneur and investor as the gradual alignment of these interfaces and, thus, a calibration of the future venture as something to which both entrepreneur and investor commit. Because the future venture is something imaginary, we face the question of how the imaginations of two parties become aligned: how can an investor ‘see’ (let alone be excited by) what an entrepreneur ‘sees’ in their mind? To address this question, we introduce a holistic account of language as a communication technology for the instruction of imagination, before directing our attention to the social context.

Language and imagination

Dor (2015) provides a compelling account of language as a tool for influencing others for social ends, illustrated by its epigraph: ‘Uttering a word is like striking a note on the keyboard of the imagination’ (Wittgenstein 1958, 6). Dor argues that language contributes to the construction of intersubjectivity through bridging an experiential gap between speakers, pertaining to inner experiences that are experientially incommunicable, i.e. they cannot be shown. For example, ‘I cannot show you that this woman in red, right there by the door, is the cousin of my ex-wife’ (Dor 2015, 28). Similarly, if one were worried about something happening elsewhere or in the future, while the presence of the worry itself can be shown with gestures or facial expressions, what the worry is about or why one worries cannot be shown. It is the function of language to make such experiences communicable.

What makes Dor’s model particularly attractive for our purpose is Dor’s idea that language communication has arisen in response to situations of increasing epistemic dependency. These are situations in which (1) an individual A experiences something that calls for action, but A cannot act alone; (2) another individual B can act but has not experienced the call for action; and (3) the survival of both A and B depends on A’s capacity to get B to do what is needed. In this situation, the communicative act of A is not intended for B to experience something but to imagine something. In this regard, Dor argues that language is essentially a socially constructed communication technology dedicated to the instruction of imagination in others. Our linguistic communication provides our interlocutors with materials from which they can construct in their imagination the experience we intend to share with them.

We see a direct analogy between this archetypal situation of epistemic dependency and the situation that involves an entrepreneur and an investor. The entrepreneur experiences something – a vision of future impact – that compels them to act, but they need the help and resources of the investor. In turn, the investor has the resources but does not experience the entrepreneur’s compelling vision. Therefore, the communication between the entrepreneur and the investor aims to bridge their experiential gap. The entrepreneur’s verbal account – their pitch – aims to instruct the investor to imagine something.

Language as technology for the instruction of imagination

In intentional communication, the communicator has the intention to influence another individual. In many cases, presentational means such as gestures and facial expressions, or re-presentational means such as paintings or photographs, enable the interlocutor to perceive what the communicator had intended. These means enable the communicating parties to share experiences across space or time, but they do not attempt to bridge the experiential gap between sender and receiver. In contrast, Dor proposes that language entails instructional communication: rather than sharing their experience with the receiver, the communicator provides a code that the receiver then uses ‘as a scaffold for experiential imagination’ (Dor 2015, 25). This is enabled through two components of the technology of language: (1) a conceptual or symbolic landscape, which allows for the experience to be represented by some shared symbols⁶; and (2) communication protocol, i.e. a set of rules for the construction of messages.

In experiential communication (presentational and re-presentational), the sender communicates: ‘this is my experience’. In instructive communication, the sender communicates: ‘my experience is of this type – try to imagine’. (Dor 2015, 25)

In this sense, as instruction of imagination, language enables the receiver to imagine something they may not have experienced before.

Dor’s formal model of linguistic communication between sender and receiver is outlined in Figure 3. In communicating through language, we aim to map our private experience in terms of some set of relevant, shared concepts that will constitute our message. This is not a straightforward task, as evidenced by the common experience of trying to find the right words for something we experience. Our challenge is to align our private-experiential world, made of personal categorical distinctions that are continuous, variable, and context-dependent, with a social-linguistic symbolic landscape that is much simpler and provides discrete points of reference that others can use as instructions for their imaginations.

Figure 3. Dor’s (2015) model of linguistic communication.

Communication begins with something the speaker intends to communicate. In the first step, this intent is converted into a message – a set of instructions for imagination – based on the normative rules for the communication protocol. In the second step, the message is converted into an utterance by choosing appropriate signifiers (i.e. words and expressions). The process then proceeds in the reverse order on the listener side. The listener decodes the signifiers of the utterance into a message. The message is translated into an interpretation by invoking appropriate elements from the listener’s own experience to construct an imaginary experience for the listener. Communication succeeds when the listener constructs an imaginary experience similar to what the speaker had intended.⁷ All these stages take place in a social-linguistic context that defines the shared symbolic landscape and particular communication norms. Notably, we distinguish the encoded message on the speaker’s side from the decoded message on the listener’s side (Message and Message* in the figure) in order to allow for imperfections and misunderstanding in how words are used and interpreted.

Adapting Dor’s model to entrepreneur-investor communication

The model in Figure 3 is particularly instrumental for our purpose due to its distinction of stages 1/4 and 2/3 and, thus, of the interfaces between experiential content and message, and between message and utterance. The first interface enables us to refer to the message – the future venture in our case – in formal terms that are distinct from the imaginary experience of the entrepreneur or investor (Davidsson, Grégoire, and Lex 2021). In semiotic terms, this is the signified, as the conceptual categories through which an experience is to be described. The second interface enables us to see how the future venture becomes a discursive object, having been given a linguistic form (Cornelissen and Clarke 2010). In semiotic terms, this is the signifier, as the actual words used to invoke the descriptive concepts.

In Figure 4, we adapt Dor’s model to the specific setting of the entrepreneur-investor interaction and, thus, the dialogical nature of that interaction. In the figure, we distinguish the mental realm of the entrepreneur, in which (1) they map their experience (e.g. imaginary future) into a formalized message of a future venture and (2) they give that message a communicative form. Similarly, we distinguish the mental realm of the investor, in which (3) they infer the meaning of what they hear into a formalized interpretation of a future venture* and (4) invoke a corresponding experience. Notably, the two initial formalizations of the future venture – as made by the entrepreneur and by the investor – belong also to a conceptual realm in which their calibration occurs. In the ensuing dialogue, the process flows from the investor to the entrepreneur, whereby (1’) the investor reacts to their experience to engage with their formalization (e.g. highlight or question elements), (2’) give that message a communicative form; (3’) the entrepreneur infers the meaning of what they hear and relate to their own formalization, and (4’) invoke a corresponding experience that is integrated with their prior experience. And so, the dialogical cycle continues back and forth until the formalizations become aligned and the two parties have a shared imagined future to which they can commit.

Figure 4. Linguistic communication in entrepreneur-investor interaction.

Dor’s distinction between message and utterance enables us to delineate for analytical purposes the realm of the symbolic or conceptual from the realm of the rhetoric. We can understand the symbolic through Mead’s (1932) seminal idea of mind as arising from a social process of communication in which significant symbols evoke certain meanings in the experiences of the communicating parties. This is also reinforced in Wittgenstein’s (1958) notion of ‘language-game’ as the whole of a language and a particular way of life into which it is woven: it is only in the context of a specific language-game that words and gestures have a specific meaning. This directs our attention to the social practices within which symbols acquire their significance or power. In the next section, we bring in the ideas of Bourdieu, which give us useful language to understand the social context of how the words of the entrepreneur can hold sway over the investor by virtue of meaning something significant.

The power of words

The communicative interaction between entrepreneur and investor is something that is visible to us as researchers. In his theory of practice, Bourdieu⁸ aims to go beyond such visible elements of a social world – individuals, groups, interactions – to consider the broader, invisible system of relations within which they acquire their meaning. Such relational thinking is captured by his key notion of ‘field’ as the social context within which individuals act, defined as a configuration of relations between positions. An immediate analogy comes to mind with notions from physics, such as a magnetic field, which is invisible to a human observer but which exerts influences on the behaviour of objects within it. Bourdieu emphasizes that his work is not about reductionist ‘social physics’ since social fields are not only fields of forces but also fields of struggles to transform or preserve such forces. The notion of field is used interchangeably with game and market to highlight (1) that it is an arena in which players compete with certain stakes and whose very playing of the game is a testament that the game is worth playing; and (2) the relative value of stakes varies across games. In this sense, fields are open spaces with dynamic boundaries shaped by the struggles within them.

Fields, capital, and habitus

The forces that operate within a field constitute ‘capital’, defined as ‘accumulated labor (in its materialized form or its “incorporated”, embodied, form) which, when appropriated on a private, i.e. exclusive, basis by agents or groups of agents, enables them to appropriate social energy in the form of reified or living labor’ (Bourdieu 1986, 241). The possession of certain capital is what makes an agent relevant or meaningful (as opposed to negligible) within a field and what enables them access to the specific ‘profits’ that are at stake within the field. The distribution of capital determines the structure of the field. Social agents are bearers of capital and orient themselves to preserve or subvert the current distribution of capital. Notably, fields enable the conversion of one form of capital into another (Thompson 1991).

Bourdieu (1986) distinguishes three main species of capital – economic, cultural, and social. Economic capital refers to something that is immediately and directly convertible into money, such as financial and material assets. Cultural capital refers to familiarity with the culture of a field and can exist in three states: embodied (long-lasting dispositions of mind and body including linguistic capacities), such as managerial skills and experience of an entrepreneur; objectified (cultural goods), such as software developed by an entrepreneur; and institutionalised, such as gaining approval from an incubator. Social capital refers to ‘actual or potential resources which are linked to possession of a durable network of more or less institutionalized relationships of mutual acquaintance and recognition’ (Bourdieu 1986, 21). To these, Bourdieu also adds symbolic capital as ‘the form that one or another of these species takes when it is grasped through categories of perception that recognize its specific logic’ (Bourdieu and Wacquant 1992, 119). So, when someone recognizes an actor’s possession of certain economic, social, and cultural capital as significant, this perceived significance constitutes the symbolic capital of that actor. For instance, for an entrepreneur who is an alumnus of Y-Combinator, such cultural capital can be of symbolic significance to those who know this prominent accelerator and thereby see it as a source of prestige.

The language of fields and capitals is helpful for illuminating the coming together of entrepreneurs and investors, as illustrated in Figure 5. Their interaction takes place in a field of new venture funding in which entrepreneurs compete for investors’ capital to fund their ventures, and investors compete for access to invest in the most promising ventures. At the same time, entrepreneurs seek to establish themselves and compete in a primary field – the market of their venture – for which they need to stake economic capital to be converted into necessary material assets or cultural and social capital. Similarly, investors operate in a primary field of investing in which they compete with others for reputation that can facilitate access to investment opportunities.

Figure 5. Fields and capital in entrepreneur-investor interaction.

For agents within a field, Bourdieu captures the logic of their practice through the concept of habitus, defined as a set of dispositions whereby agents are inclined to act in certain ways, exhibiting practical mastery or ‘feel for the game’ (Bourdieu 1990, 66). Using the term habitus rather than habit aims to highlight its generative capacity in relation to the world. In the sense in which habitus is deemed socialized subjectivity, field and habitus are in constant interplay: the field structures the habitus as embodied knowing; and habitus helps constitute the field as meaningful. ‘Social reality exists, so to speak, twice, in things and in minds, in fields and in habitus, outside and inside of agents. And when habitus encounters a social world of which it is the product, it is like a “fish in water”: it does not feel the weight of the water, and it takes the world about itself for granted’ (Bourdieu and Wacquant 1992, 127).

Given the dynamic nature of fields as sites of struggle for transformation and preservation – what Bourdieu refers to as an ‘ongoing dialectic of subjective hopes and objective chances’ in the social world (Bourdieu and Wacquant 1992, 130) – discrepancies can arise between habitus and field, resulting in a disjunction between the objective structures of the field and the mental structures of the habitus. Mental structures can be deemed out of sync when they are left behind (i.e. are obsolete for the changed conditions in the world), but also when – as is the case of bold, disruptive entrepreneurs – they step ahead of objective conditions. In a Quixotic sense, such entrepreneurs see a future world that others do not (yet) see and would readily deem crazy. Yet, investors are attracted to such disjunctions as they compete for abnormal returns, which in practice means returns that are not aligned with the objective chances reflected in the market cost of capital. In other words, an investor looks for what is not yet adequately priced.

Balancing continuity and discontinuity between present conditions and future venture

The conversation between entrepreneur and investor is about a future venture and its place in the future of the competitive field in which it will operate. As newcomers in that field, entrepreneurs gain legitimacy by ‘fitting in’ and ‘standing out’ in the structure of the field (De Clercq and Voronov 2009). These notions can help us juxtapose present and future field structures in terms of their continuity (what remains the same or familiar) and discontinuity (what will be different or novel). In terms of the formalism of Figure 1, future-venture stories can be fully continuous (story 1) or fully discontinuous (story 4). In between, they combine elements of novelty and familiarity, invoking perceptions as realistic (stories 2, 3).

Building an operating venture involves many activities that are implicated in a future-venture story as more or less familiar elements. Investor parlance distinguishes technology, product, market, distribution, and organization as broad categories for the aspects of a future venture about which an investor might be more or less certain (e.g. Ruhnka and Young 1991). Technology pertains to how the venture will solve a particular core problem. Product pertains to the design and manufacturing of the solution as the venture’s market offering. Market pertains to the existence of willing buyers for the offering. Distribution pertains to how those willing buyers are to be reached. Organization pertains to building the infrastructure to produce, market, and distribute the offering at a desired scale. For instance, the origin of Netflix involved a familiar technology (DVD rental), a familiar market of those who like to watch movies at home, and a familiar organization. At the same time, its product offering (a subscription service) and distribution (by mail) were unfamiliar. It is not that such products and distribution were unknown. Indeed, newspaper and magazine subscriptions were well established, and so was the delivery of letters, parcels, magazines, and newspapers by mail. Similarly, when Yahoo puzzled investors with its desire to make its internet directory freely available to all, free broadcasting of radio and television had been well established.

In this regard, the unfamiliarity or uncertainty of a description arises not necessarily from its being entirely new to the world but from its intended use in a new field. This relates to non-obvious ways in which the two fields are similar, requiring certain prior knowledge to be intuited and appreciated (Gregoire, Barr, and Shepherd 2010). Thus, it was Michael Moritz from Sequoia Capital, with his extensive background in the media industry, who appreciated the potential of Yahoo as a media brand (Mallaby 2022). Therefore, the cultural capital of the investor is implicated in the message they decode from the entrepreneur’s story and thus in the image they build of the future venture. As investors combine assessment of business viability with perceptions of the entrepreneur (Huang and Pearce 2015), an investor determines whether (1) the future-venture story is realistic and (2) the entrepreneur is the right agent to realize it. In our approach, talk about viability is fundamentally about the perception of a future-venture story as realistic.

The power that accrues to both determinations is symbolic in nature. The first, akin to the power that Cervantes achieves through his description of Don Quixote, depends on the reader’s cultural capital to engage with and appreciate the writing. In our case, it is the investor’s cultural capital that helps them engage with and appreciate the future venture in realistic terms. Regarding the second perception, Bourdieu emphasizes that its symbolic power is grounded in the deeper relation between speaker and listener. ‘Symbolic power, the power to constitute the given by stating it, to act upon the world by acting upon the representation of the world, does not reside in “symbolic systems” in the form of an “illocutionary force”. It is defined in and by a definite relation that creates belief in the legitimacy of the words and of the person who utters them, and it operates only inasmuch as those who undergo it recognize those who wield it’ (Bourdieu and Wacquant 1992, 148). In this sense, the efficacy of an utterance is inseparable from external factors of language, which are enduring social relations bestowing power, status, and different types of resources to actors (Bourdieu 1991).

We argue that the symbolic power of the entrepreneur’s future-venture story is twofold: (1) in terms of the future venture as perceived in realistic terms and (2) in terms of the entrepreneur as a credible instigator of making the venture real. In the analogy of Don Quixote, there is the appreciation of Don Quixote as a realistic character and the evaluation of whether the storyteller can become a real-world incarnation of that character. Unlike a work of fiction, a future-venture story is intended to become real, bringing additional focus on the storyteller.

Opportunity capital

As a synthesis, we now propose a formal account of the power of the future-venture story, defined through the notion of opportunity capital and illustrated in Figure 6. Opportunity capital captures the symbolic significance of the future-venture story and thus the ‘weight’ that counter-balances the investor’s economic capital in their funding commitment. Based on the entrepreneur’s story and its refinement in the subsequent dialogue between entrepreneur and investor, the investor constructs in their imagination a future venture that ‘pulls’ them to participate. The notion of pull, with the gravitational connotation of the source of the pull, suggests that the entrepreneur’s pitch has symbolic significance or weight in the eyes of the investor. So, opportunity capital – as a type of symbolic capital – can be defined as the symbolic value of an entrepreneur’s future-venture story whose development an investor is willing to support.

Figure 6. Opportunity capital as symbolic significance of future-venture story.

The symbolic value of the future-venture story has two components: (1) a realistic description in the eyes of the investor, intuited through the investor’s cultural capital; (2) a credible execution, intuited through the entrepreneur’s symbolic capital as the perceived significance of the entrepreneur’s cultural, social or economic capital in the eyes of the investor. It is thus in the dialogue between entrepreneur and investor – each enacting their habitus – that the future venture becomes a significant symbol as the object of the future-venture story. Symbolic capital has magical efficacy (Bourdieu 1991) in that, through the recognition brought by it, the actor has the power to determine ‘what is normal or legitimate’ (Everett 2002, 59) in the field. It enables the entrepreneur to conform to prevailing arrangements in a particular field and, at the same time, to be innovative and act differently (De Clercq and Voronov 2009). In this regard, the actor’s symbolic power is fundamental for the efficacy of their speech acts (Bourdieu 1991). Through what they say, entrepreneurs hope to invoke in investors a certain stance towards the images that the investors reconstruct in their minds, perceiving them as inspiring, plausible, and believable.

Opportunity capital is a specific type of symbolic capital that implicates the holistic triad of entrepreneur, investor, and story. It arises not at once but in the back-and-forth dialogue between entrepreneur and investor, which calibrates the meaning of the future venture (Dimov 2020). Through the story and their own cultural capital, the investor infers a realistic depiction of the future venture. Through the story and the entrepreneur’s symbolic capital, the investor infers whether the entrepreneur can make the future venture real. The holistic nature of the triad implies that opportunity capital would be different when (1) the same entrepreneur and the same story meet a different investor; (2) the same entrepreneur tells a different story to the same investor; and (3) a different entrepreneur tells the same story to the same investor. In the opening example of Dropbox, what attracted funding was the symbolic significance of a certain future-venture story told by Houston (maximum SAT score and MIT graduate) and appreciated initially by the Y Combinator and later, on the back of the symbolic value of being a Y-Combinator graduate, by Sequoia Capital.

Discussion

Transformative, high-impact entrepreneurship brings together entrepreneurs with bold ideas for the future and investors with capital (e.g. Florida and Kenney 1988). While entrepreneurs can ‘see’ promising futures but lack the resources to pursue them, investors have financial resources but no visible end to which to deploy them. To attract resources for their ventures, entrepreneurs need to ‘sell their opportunities’ (Dimov 2011, 74) to investors who are looking for ‘diamonds in the rough’ (Huang and Pearce 2015).

Against this broad-brush description of the interaction between entrepreneur and investor, this paper sought to illuminate the mechanisms through which what is initially a fictional object (an imaginary future venture) that can only be described symbolically (e.g. through language) is capitalized by attracting investment commitments. The premise of the paper is that in the exchange of something valuable (capital) for participation in the realization of something imaginary (future venture), the imaginary carries symbolic significance. We capture this significance by introducing the notion of opportunity capital and an account of how it arises in the communicative interaction between entrepreneur and investor. We see this interaction in holistic terms, with the future venture as a significant symbol that is calibrated in the process. To explain how the imaginations of two parties can become aligned, we incorporate a model of language as a communication technology for instructing imagination (Dor 2015). It draws a distinction between a message (as something symbolic) and an utterance (as something rhetoric). We then explain the symbolic power of the words of a future-venture story using Bourdieu’s notion of symbolic capital, as grounded in his theory of practice (Bourdieu and Wacquant 1992). Opportunity capital is a specific type of symbolic capital that implicates the full triad of entrepreneur, investor, and venture story.

Contributions

Our work contributes to literature that has focused on the early stages of venturing and the acquisition of resources by entrepreneurs. We provide a foundational account that can help connect discussions of the object of entrepreneurial pursuits with discussion of how it is featured in storytelling. Thus, while some work has focused on what entrepreneurs pursue (e.g. Davidsson, Grégoire, and Lex 2021), other work has focused on how entrepreneurs communicate their ideas to investors (e.g. Clarke, Cornelissen, and Healey 2019). Put in simplest terms, while some scholars emphasize that entrepreneurs pursue imaginary, not-yet-real ventures, others emphasize that they can tell real-venture stories to investors. We highlight the complex interplay between an object and its description as subject to perceptions of familiarity and novelty, implicating the social context in which entrepreneurs and investors communicate.

Our first contribution relates to providing a socio-linguistic account of what entrepreneurs pursue and how it can be deemed significant. There is a shared sense among scholars that entrepreneurs are driven individuals, that there is something that drives them, and that this ‘something’ relates to the future and, in this sense, is imaginary at first. Coming to grips with the ‘something’ has proven challenging, however, in that many different aspects come into play in the various scholarly accounts of it. It can enable the entrepreneur to profit in the future (McMullen and Shepherd 2006), it informs what the entrepreneur does and how they reason (Dimov 2011; Sergeeva, Bhardwaj, and Dimov 2022), and it is apprehended or described as an idea (Davidsson 2015; Vogel 2017; Wood and McKinley 2010).

More broadly, it is an imagined, desirable and believed-to-be-possible future, about which an entrepreneur expresses confidence and which the entrepreneur aims to actualize (Ramoglou and McMullen 2024). But because it is something the entrepreneur imagines, they cannot experientially communicate it to someone else. It is not enough to say, ‘I imagine something, I believe it is possible, I am very confident about it, and I am committed to make it real’, for the interlocutor is bound to say, ‘I can see you are excited and energized by it, but what is it?’. Conceptual talk of venture idea as ‘an envisioned venture in and of itself, disregarding any agent with whom it may be associated’ (Davidsson, Grégoire, and Lex 2021, 2) overlooks the fact that although it is supposed to be something external to both minds and language, at the start it is only apprehensible in mind and expressible through language.

By bringing Dor’s (2015) model of language into our account, we highlight the epistemic dependency between an entrepreneur and another person (including the scholar writing about the entrepreneur) in understanding the first-person experience of the entrepreneur’s imagination. In addition, the distinction between a message as meaning to be conveyed (signified) and an utterance as its physical expression (signifier) enables us to focus on the calibration of the future venture as a significant symbol in the communication between entrepreneur and investor. The need to communicate an experiential image of the future to others directs attention to the conceptual/symbolic realm as a space of meaning when discussing future ventures. By using Bourdieu’s framework for symbolic capital, we explain how a future venture can become a significant symbol. Our construct of opportunity capital comprises a future-venture story that can be rendered realistic by the investor’s cultural capital and a credible sense that it can be realized, arising from the entrepreneur’s symbolic capital.

Our second contribution relates to enhancing the literature on entrepreneurial communication with a holistic account that integrates the active role of the investor in calibrating the future venture. Although prior work has offered deep insights into how entrepreneurs envision and communicate future ventures, it has inadvertently kept the interlocutors (such as investors) and the very object of dialogue (future venture) out of the picture. Configuring the inner thoughts and imaginations of entrepreneurs to fit the demands of spoken language is an active process of sensemaking that uses inductive reasoning such as analogies and metaphors (Cornelissen and Clarke 2010; Hill and Levenhagen 1995). This work acknowledges that the formal model or basic images of venture evolves in response to seeking legitimacy with external stakeholders, yet there is no account of the specific motivations of the investors and their own sensemaking process in the calibration of the future venture. Recent work demonstrates that meaning is conveyed via both verbal and non-verbal (e.g. gestures) means and that the evocation of mental imagery is a key mechanism for influencing investors (Clarke, Cornelissen, and Healey 2019). What remains unclear, however, is the nature of the images and what investors do with them in making a commitment.

Our paper enhances this work through the account of opportunity capital as the integration of investor- and entrepreneur-specific cultural and symbolic capital into a calibrated conception of a future venture. We show that a positive perception of the prospects of this future venture involves both a realistic future-venture story and the making of this story real. Whether the story is compelling depends on how the investor reconstructs in their imagination the entrepreneur’s story. Thus, just as entrepreneurial imagination entails a rich array of inferential reasoning (Cornelissen 2013), so does investor imagination. And just as the entrepreneur’s prior experience shapes their reasoning process in constructing an image of the future venture (Cornelissen and Clarke 2010), so does the investor’s prior experience shape their reasoning process in re-constructing this image from the verbal account of the entrepreneur. The perception of whether the story can be made real reflects the symbolic capital of the entrepreneur in the eyes of the investor and in the light of their image of the venture.

Our third contribution relates to closing what we see as a commitment gap in the notion of legitimacy that is central to the literature on entrepreneurial communication. The entrepreneur’s acquisition of resources is typically seen as a process of gaining legitimacy in the eyes of some stakeholder community (e.g. Becker-Blease and Sohl 2015; De Clercq and Voronov 2009; Khaire 2010; Stringfellow, Shaw, and Maclean 2014). Because early-stage ventures lack track records of performance, evaluating their uncertain prospects represents a significant challenge for investors (Zimmerman and Zeitz 2002). As commonly perceived desirability, appropriateness, and properness in a social context and cultural alignment (Suchman 1995), legitimacy is an essential perception that entrepreneurs seek to elicit from potential resource providers. Accordingly, entrepreneurs employ various communication strategies to fulfill the expectations of the field members and build legitimacy, such as storytelling and impression management (Lounsbury and Glynn 2001), symbolic management (Zott and Huy 2007), and stretching meanings (Gümüşay, Smets, and Morris 2020).

However, by focusing on the notion of legitimacy as desirability, this literature leaves open the difference between something being desirable and being desired, i.e. between an investor perceiving a venture as investable and actually committing capital to it. In other words, while the notion of legitimacy can help explain why certain venture proposals are screened out (as illegitimate), it cannot take us all the way to commitment. Our analytical separation of the real-venture story from making the story real provides a basis for accounting for the difference between desirable (as legitimacy) and desired (as commitment). Seeing an early-stage venture as legitimate is, in effect, seeing a future-venture story as realistic, as plausible in principle. However, investor commitment requires the further step of being convinced that the entrepreneur is the right protagonist to make this story real. Opportunity capital integrates both aspects. In this sense, it presupposes legitimacy but also incorporates the missing thread towards investor commitment, which ultimately serves to capitalize the future that the entrepreneur aims to sell.

Overall, our work presents the exchange between entrepreneur and investor as imaginary scales on which the ‘weight’ of the investor’s economic capital on one side is balanced with the (symbolic) ‘weight’ of opportunity capital on the other side. For the investor, the symbolic value of the presented ‘opportunity’ is a holistic configuration of the symbolic capital of the entrepreneur – a channelling of their economic, social, and cultural capital in the light of their venture aspirations – and the symbolism of the venture, as re-constructed from the entrepreneur’s story. It is the instructional power of language that enables the investor to ‘see’ the future that the entrepreneur imagines. In this regard, opportunity capital can be used beyond the current context of start-up investment by scholars interested in how the power of promises and future possibilities is mobilized for social change.

Future research

The concept of opportunity capital and the account of the mechanisms behind it open up promising avenues for further studies. First, as outlined in this study, opportunity capital counts on various contingencies which require more investigation. These contingencies can be grouped under the four basic factors implicated in the entrepreneur-investor encounter and activated by the venture story: the triad elements of the entrepreneur (speaker), future venture (message), and investor (audience), and the social context in which they are embedded (as outlined in Figure 2). Different combinations of these four factors can change the symbolic value of opportunity capital. This variety, in the broad sense, calls for various new questions. As we elaborated in our model, an entrepreneur’s pitch is typically followed by a dialogue between entrepreneur and investor aimed at calibrating the venture image that appears on the listener’s side. The linguistic constituents of this dyadic process need further investigation to better understand the links between the entrepreneur and investor’s imagined ‘opportunities’ and variations in the symbolic value of words. Such studies can also reveal the more immediate consequences of communication as well as its learning effects over time.

Second, in addition to contingency-based variations of opportunity capital, entrepreneurship scholars can examine the power-based nature of this construct. Opportunity capital is a specific type of symbolic capital, and it gives its bearer a symbolic power to influence others. As a source of power, opportunity capital can be employed in an investment process. This resource is also helpful in other types of negotiations, such as hiring key staff by promising equity or convincing the admision panel to a support programme. So, the role of opportunity capital in power-based relationships offers a promising pathway for future studies.

Third, in this study, we discuss opportunity capital in respect to the entrepreneur as it is a more pervasive case and in order to keep our framework simple. We consider the symbolic capital of investors through only the symbolic value of economic capital. However, investors can also hold opportunity capital when the entrepreneur desires a specific type of investor because of her/his idiosyncratic resources such as network, experience, and reputation. So, another promising avenue for future research is the examination of how investors build their opportunity capital and use it to instigate ‘smart money’ investments, i.e. when they bring more than money to the table.

Conclusion

Words have power, and this is most evident in entrepreneurs’ ability to ‘sell’ a future. Of course, words are not enough to bring such a future about, but without enkindling the imagination of investors and other early-stage supporters, the effort may not get off the ground. This study provides a new lens for scholars to study the linguistic landscape of seed-stage resource acquisition of entrepreneurs. It enables us to engage directly with the imaginary nature of the entrepreneurial spark and brings together diverse disciplines, such as linguistic communication and social practices. It also opens new research avenues by eliciting the taken-for-granted latent dynamics of ascribing value to words and capitalizing an imaginary future.

Acknowledgments

The authors thank the editor, two anonymous reviewers, and seminar participants at Southampton Business School, Liverpool University Management School, and Audencia Business School for their constructive comments in the development of the paper.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. https://a16z.com/2014/07/21/a-dozen-things-ive-learned-from-marc-andreessen/.

2. https://www.ycombinator.com/apply/dropbox.

3. There is a premise here that an entrepreneur imagines some future and feels confident about its prospects (Ramoglou and McMullen 2024). In engaging investors, the conversation focuses on that which is imagined.

4. We use this term to highlight current mode of existence, i.e. only in imagination. This is unrelated to whether what is now only imagined proves possible and eventually becomes real.

5. https://www.youtube.com/watch?v=w4eTR7tci6A.

6. The concepts through which we describe our experience give it meaning. In this sense, they define a certain description or mode of representation, as discussed earlier. In semiotics, a sign as a conveyor of meaning consists of (1) signified as a mental concept to be invoked and (2) signifier as a sound, word, image or gesture that aims to invoke the concept. For example, the linguistic sign ‘chair’ implies an association between a signifier (saying, writing, drawing or gesturing ‘chair’) and the signified chair (as a concept), which is semantically connected to other signifieds such as table, comfortable furniture, etc., and to a cluster of private experiences related to chairs (i.e. chair one has seen, sat on, read about, etc.).

7. In the outlined model, we omit the intermediary stages wherein the speaker vocalizes an utterance and the listener detects that sound to hear what the speaker is saying. Thus, we do not consider situations where the speaker may mispronounce words or the listener may hear words wrongly.

8. In the overview of Bourdieu’s work, we rely on his reflections on key ideas and concepts presented in Bourdieu and Wacquant (1992).