Founder smiles increase investor trust and funding

Entrepreneurs seeking funding increasingly present themselves to investors for the first time online. In these digital first impressions, some entrepreneurs smile while others do not. We posit that smiling increases investors' perceptions of trustworthiness and willingness to invest. Through five studies, we investigate this effect. Two pilot studies provide initial evidence: one based on interviews with 10 early-stage investors and another on a randomized experiment involving 210 entrepreneurs and prospective entrepreneurs, both showing that smiling boosts perceived trustworthiness and investor interest. Building on these findings, an analysis of 20,316 ventures on Crunchbase demonstrates that smiling in profile pictures is significantly associated with both higher likelihood of securing funding and higher amount raised. A study of 1,091 Shark Tank pitches further reveals that smiling is associated with higher funding odds, with trustworthiness serving as a key mediator. Finally, in a randomized experiment with 51 venture capitalists, founders were assessed as having a 16.6% higher probability of a successful exit and were valued $2.1 million more than non-smiling founders, with trustworthiness mediating 36% and 27% of the overall treatment effect for venture valuation and exit probability, respectively.