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Narcissists Have The Most Crowdfunding Success

Research undertaken by Trinity Business School has evaluated the impact of ‘dark tried’ personalities on the success rates of equity crowdfunding campaigns.
  • Exhibiting narcissistic behaviour in campaign pitches is key to securing higher crowdfunding investment
  • But don’t go too far! Machiavellian and psychopathic behaviour doesn’t garner such a positive response
  • Researchers suggest that narcissism in moderation can aid financing goals

Over the past decade, thanks to platforms like GoFundMe and Kickstarter, the popularity of crowdfunding has soared. Budding entrepreneurs now have more avenues than ever before for securing investment for their big ideas, offering up shares in their firms to just about anyone with money to spend. According to Statista, the crowdfunding sector is set to reach new heights in the coming years, with the global market value expected to climb to around 40 billion USD by 2026.

For many, it unsurprising that crowdfunding has become so popular. It presents aspiring entrepreneurs with the opportunity to secure the financing they need without having to jump through hoops to convince a small pool of wealthy investors to get on-board. Meanwhile, it enables countless keen investors, who may not have the means to individually funnel hundreds of thousands of dollars into stocks, to get in on the ground floor of what could one day be a Fortune 500 company.

The benefits of a successful crowdfunding campaign are manifold, particularly for entrepreneurs. But as this means of financing becomes increasingly popular amongst aspiring business leaders, creating an attractive, and ultimately successful, fundraising pitch has become all the more important. Yet, according to a recent study, the key to a successful crowdfunding campaign is something many wouldn’t expect.

People who exhibit narcissism – behaviour characterised by grandiosity, egotism and a lack of empathy – have the most crowdfunding success, research from Trinity Business School has found.

The study, undertaken by Dr Francesca Di Pietro, an Assistant Professor in Business Strategy at Trinity, evaluated the impact of ‘dark tried’ personalities on the success of equity crowdfunding campaigns. The dark triad comprises of three personality traits: narcissism, Machiavellianism – characterised by manipulative behaviour, a lack of morality and self-interest – and psychopathy, identified by continuing antisocial behaviour, impulsiveness, selfishness and remorselessness.

All three personalities are widely considered malevolent and undesirable, leading people to often distrust individuals who display these characteristics. Yet, Di Pietro’s study revealed that individuals who display the right levels of narcissism can secure more crowdfunding investment than others.

Examining 338 equity crowdfunding campaigns – in which entrepreneurs seek to sell shares in their firm in return for investment – the researchers found that displaying ‘medium levels’ of narcissism within campaign pitches led to higher amounts investment.

According to Di Pietro, narcissists are able to attract investors using two key mechanisms, which she describes as the persuasive and commitment effects.

“Narcissists employ rhetoric to persuade, influence and mobilize others, and often do so in a spontaneous and encouraging manner,” the professor says. “Similarly, they demonstrate commitment and work hard to reach to their goals, which is displayed in their expressions and is easily understood by investors.”

However, Di Pietro notes that there is a turning point, in which an entrepreneur’s narcissism can stand in the way of crowdfunding success.

“If narcissism levels are too high, they can actively discourage investment, whether that be through dishonest behaviour and unreliability when trying to be too persuasive, or even rude and aggressive due to being excessively committed.”

This caveat is apparent in the study’s findings, as the researchers revealed that just as too little narcissism can limit your fundraising success, entrepreneurs who exhibited extremely high levels also secured less investment overall.

Meanwhile, Di Pietro and her colleagues found no correlation between Machiavellianism and crowdfunding success, and a negative relationship between psychopathy and investment levels. The latter finding may prove surprising to some as, in recent years, numerous studies have pointed towards the prevalence of individuals with psychopathic tendencies in the C-suite of some of the world’s largest companies. One study from Bond University dating back to 2016, found that around 1 in 5 CEOs exhibited psychopathic traits.

But psychopaths aren’t the only ones with an ability quickly climb the corporate ladder. A recent study from MIP Politecnico di Milano revealed that narcissists also make their way to the CEO role quicker than their counterparts.

So is it so surprising that narcissism, at least in the right amount, actively increases the likelihood of crowdfunding success?

Confidence, the use rhetoric that is both spontaneous and motivating, and an open commitment to success – all things Di Pietro described as being in a narcissist’s toolkit for attracting investors, and all things that would probably draw me to invest in them. So for aspiring entrepreneurs looking to take that next step and are in need of a cash injection, a healthy dose of narcissism could go a long way.

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