The Academy of Management recently published a study by Laurent Vilanova and Ivana Vitanova, professors at the University of Lyon 2, to examine how an entrepreneur’s humility affects venture capitalists’ willingness to support the former’s business venture.
The study revealed that “early-stage investors perceive that humble entrepreneurs have higher constructive qualities and are more compatible with investors than non-humble entrepreneurs. Expressed humility has an overall positive effect on investors’ evaluations of the venture’s likelihood of success and their willingness to support the venture.”
In fact, more than 50 VCs said that ambitious entrepreneurs who do not show humility come across as overconfident, arrogant and stubborn, not typical traits they would want in the founders they would back.
“We found that VCs perceive humble entrepreneurs to have more constructive qualities, to be more coachable and were more likely to click with the investors, who will spend countless hours shaping the next steps of these early-phase companies,” Vilanova said in The Wall Street Journal.
Interestingly, even though the entrepreneurs who displayed humility were perceived as being less innovative than their aggressive counterparts overall, the study showed that the positive traits outweighed the negative. Ultimately, VCs were 1.7 times more likely to make an offer to the humble entrepreneur than the other.
There’s nothing wrong in being a little unsure
The authors found that founders expressing their doubts could work in their favor when seeking investors. Instead of appearing totally sure of everything, they recommend saying something like: “We do believe we have a good project. However, there are things that we need to address.”
Furthermore, it is also important for entrepreneurs to avoid sounding overconfident and not say things such as: “I know exactly where I would like to take this venture. And while I appreciate the opinions of others, in most cases I prefer to follow my own gut.”
“VCs appreciate entrepreneurs who set high goals for their ventures. At the same time, they estimate that ambition without humility is a sign of arrogance, overconfidence and stubbornness,” Vilanova added.
