A counterintuitive strategy may help you get more investors for your business

Though in the professional world, containing or even repressing emotions is usually encouraged, wearing your feelings on your sleeve as an entrepreneur may pay off big time.

Entrepreneurs should show their feelings

It’s generally believed that entrepreneurs, or anyone looking to succeed in business for that matter, must exude confidence and calmness at all times. After all, if you come across as frenzied, unorganized, and unsure of yourself, how can you expect anyone to believe or invest in your idea?

All that makes sense to a certain point, but the fact of the matter is no one is self-confident 100% of the time. We all have moments of self-doubt and trepidation.

Now, a new study reports that modern investors prioritize transparency over unflinching positivity. Researchers from Washington State University say entrepreneurs who display a variety of emotions including anger, fear, and happiness during pitches or presentations tend to be more successful in terms of securing funding.

“Our findings show that there’s a role for different emotions in pitches,” says lead study author Ben Warnick, WSU assistant professor in WSU’s Carson College of Business. “For example, an angry facial expression can convey how much you care about something, instead of just smiling, which on the extreme end can come off as insincere or over-optimistic. It’s good to balance that out. There are different reasons for using different expressions.”

Close to 500 pitch videos from the online crowdfunding site Kickstarter were analyzed for this project. A facial analysis software program was used to identify various emotions in presenters’ faces, and even detect neutral expressions within every frame of each video. All of that emotional research was then compared to subsequent investment decisions and outcomes. This was determined according to three considerations: total amount raised, number of contributions, and whether or not the entrepreneur achieved their stated financial goal.

While happiness, anger, and fear all correlated with fundraising success, the only emotion that was pretty much always a negative was sadness.

Most of the more successful studied entrepreneurs were able to evoke different emotions at different times during their pitch. Some started with overall positivity and enthusiasm for their idea before moving onto a more angry or fearful tone when discussing setbacks and all the hard work they had already put in. 

Conversely, presenters who showed little to no emotion at all, or even just one emotion, generally performed worse than their more animated entrepreneurial peers. 

Of course, it’s also possible to use too much emotion. No investor presentation should turn into a work of Shakespeare. 

“There’s a Goldilocks point where you can have too little or too much,” Warnick notes. “Expressing happiness, anger and fear all promote funding up to a point. But if you express any one of these emotions too frequently, you’re hurting your funding prospects.”

Interestingly, study authors also note that their work in no way determined if the emotions being displayed were legitimate. It’s quite possible some entrepreneurs were putting on a show for prospective investors.

“Some people might be very expressive, where what they’re feeling on the inside shows quite readily to other people,” Warnick concludes. “Others might be engaging in impression management, in other words, faking it.”

As society and culture continue to change at a rapid pace, it’s become clearer and clearer that young adults and modern consumers/investors/stakeholders place being genuine very high on their list of priorities. Decades ago business owners were expected to be stoic and confident. Today, just being authentic works just as well.
The full study can be found here, published in the Journal of Business Venturing.