This Personality Trait Helps Founders Raise Millions: A Deep Dive
A deep dive into Freiberg and Matz’s 2023 Paper ‘Founder personality and entrepreneurial outcomes' This episode dives into groundbreaking research on how a startup founder's personality traits impact fundraising, investor interest, and exit success. The study, conducted on thousands of founders, analyzes the Big Five Personality Model and how traits like openness, conscientiousness, and neuroticism influence startup outcomes. Neurotic founders tend to struggle, losing an average of $90K in their first fundraising round, while detail-oriented founders raise more capital but face challenges in exiting. The study leverages machine learning and Twitter data to assess founders' traits at scale, making it the first of its kind. Key insights include why openness and agreeableness attract investors, why conscientious founders struggle with exits, and what VCs should look for when evaluating teams. The conversation also explores how founders can optimize their traits for success and how investors might be biased in selecting certain personalities. Link to the paper: https://www.pnas.org/doi/10.1073/pnas.2215829120- References Freiberg, B. Matz, S. (2023). Founder personality and entrepreneurial outcomes: A large-scale field study of technology startups. Proceedings of the National Academy of Sciences, 120(19), e2215829120. https://doi.org/10.1073/pnas.2215829120