TLDR:
- Physical attractiveness of male entrepreneurs and venture capitalists significantly impacts financial decision-making in venture capital investment.
- Study led by Marc D. Bahlmann of VU University Amsterdam focused on the European IT industry and was published in Frontiers in Psychology.
A new study led by Marc D. Bahlmann of VU University Amsterdam explores the impact of physical attractiveness on venture capital investment decisions in the European Information Technology (IT) industry. The study, published in Frontiers in Psychology, reveals that the physical attractiveness of male entrepreneurs and venture capitalists plays a significant role in financial decision-making.
Bahlmann’s research aims to understand the evolutionary underpinnings of risk-taking behaviors in the context of innovation and venture capital funding. By analyzing a dataset of 341 male-led European IT ventures and assessing physical attractiveness through graduate student ratings of LinkedIn profile photos, the study found that attractiveness influenced investment decisions in the first funding rounds. Venture capitalists of average or below-average attractiveness tended to invest more in startups led by attractive entrepreneurs, showcasing the impact of physical appearance on financial risk-taking.
As the funding process progressed to the second round, the study observed a shift in how physical attractiveness influenced investment decisions, particularly for venture capitalists of below-average attractiveness. The findings suggest a “beauty penalty” effect, where initial biases based on attractiveness could reverse if entrepreneurs fail to meet expectations set by their looks. The study offers important insights into the role of physical attractiveness in venture capital decision-making, though it acknowledges limitations in its reliance on correlational data and suggests avenues for future research.
