Picturing success: The informational role of visual cues in initial coin offerings

Abstract

Visual cues are increasingly used in financial disclosures to improve information dissemination. While prior research has primarily focused on the informational value of linguistic attributes in financial disclosures, we draw on dual coding theory and investigate how infographics in disclosures affect fundraising success. Exploiting the high level of information asymmetry of Initial Coin Offerings (ICOs), we find that infographics positively influence the amount raised, particularly when the textual content is highly technical. We explore the mechanisms behind this result, showing that infographics are associated with improved third-party analyst ratings and reduced rating dispersion, which suggests that visuals help mitigate information asymmetry. Furthermore, qualitative, status summary, and startup-specific infographics further enhance fundraising efforts. Overall, visual cues significantly enhance the informational value of entrepreneurial financing disclosure, leading to greater funding outcomes.