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The narcissism of crowdfunding entrepreneurs

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Abstract

Social networks and personality traits of the entrepreneur affect investors’ willingness to finance start-ups, particularly in reward-based crowdfunding where observable individual characteristics are paramount. We study the impact of crowdfunding entrepreneurs’ narcissism on campaign design and campaign outcome. We distinguish between the ego-defensive behavior and grandiose/arrogant behavior of narcissists in the hypotheses for campaign design. We find that more narcissistic crowdfunding entrepreneurs set less ambitious goals and longer campaign durations, consistent with ego-defensive behavior. We further document that more narcissistic entrepreneurs are less successful than other entrepreneurs, suggesting that crowdfunders recognize the narcissistic tendencies of entrepreneurs and are more reluctant to support them. Our results are consistent with recent conceptual research, suggesting that there are specific effects of narcissism in the early-stage entrepreneurial context.

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Notes

  1. The Oxford English Dictionary defines narcissism as “extreme selfishness, with a grandiose view of one’s own talents and a craving for admiration, as characterizing a personality type.” The academic literature offers different views. As discussed below, it is at times considered either as a personality disorder (American Psychiatric Association 2013)—leading to impairments in personality and interpersonal functioning due to grandiosity, attention seeking, and self-centeredness—or simply as a personality trait (Emmons 1984, 1987). We take the second approach.

  2. Openness, conscientiousness, extraversion, agreeableness, neuroticism

  3. Chatterjee and Hambrick (2007) also use other indicators, which cannot be calculated in our context. The other indicators in Chatterjee and Hambrick are as follows: the size of the CEO’s photo in the annual report, the prominence of the CEO in corporate press releases, and CEO relative pay. However, the first pronoun indicator is shown in their study to be highly correlated with the other indicators, justifying the fact that we use it as our main and only indicator.

  4. Mollick (2014) examined Kickstarter campaigns with very large funding goals and concluded that they all had unrealistic expectations, and (as a result) none of them got funded.

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Acknowledgements

The authors thank Thomas Åstebro, Riccardo Calcagno, Raghavendra Rau, Scott Seibert, Silvio Vismara (the Editor), Peter Wirtz, three anonymous referees, and seminar and conference participants at Lyon II University, Aix-Marseille University, University of Regensburg, AFFI 34th International Conference (University Grenoble Alpes Valence), the Second Annual Cambridge Conference for Alternative Finance (University of Cambridge Judge Business School), and the 6th HEC Workshop on Entrepreneurship (HEC Paris) for their thoughtful comments and suggestions.

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Authors and Affiliations

  1. FAIRR Research Center, SKEMA Business School–Université Côte d’Azur, Avenue Willy Brandt, F-59777, Euralille, France

    Helen Bollaert & Armin Schwienbacher

  2. UFR Sciences Economiques et Gestion – COACTIS, Université Lumière Lyon 2, MSH – 14/16 av Berthelot, F-69009, Lyon, France

    Gaël Leboeuf

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  1. Helen Bollaert
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Table 7 Definition of variables
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Bollaert, H., Leboeuf, G. & Schwienbacher, A. The narcissism of crowdfunding entrepreneurs. Small Bus Econ 55, 57–76 (2020). https://doi.org/10.1007/s11187-019-00145-w

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