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Abstract

We investigate whether the confidence of management teams, defined as the certainty about handling what one desires to do, affects the capacity of firms to raise external capital. Drawing on psychology research, we run an experiment in which participants are asked to assess the confidence of the management teams of 515 initial coin offerings (ICOs) by appraising their pictures. Controlling for venture and offering characteristics, we find a positive association between confidence and the fundraising amount. The results are robust to alternative estimation methods and other visual traits such as attractiveness and intelligence. Our study highlights the importance of using images as a channel to communicate with prospective investors in alternative finance.
Original languageEnglish
Article number101900
JournalJournal of Corporate Finance
Volume77
Early online date21 Jan 2021
DOIs
Publication statusPublished - 31 Dec 2022

Bibliographical note

Funding Information:
We are very grateful to the editors Douglas Cumming and Bart Lambrecht, the guest editors Sofia Johan and Hisham Farag, and the three anonymous reviewers at the Journal of Corporate Finance whose detailed and constructive comments sharply improved the overall exposition of the paper. We would also like to send special thanks to Alfred Lehar, Christian Fisch, Michal Kosinski, Tom R Vanacker, Michele Meoli, and the seminar participants at the Birmingham Business School and the Journal of Corporate Finance Co-sponsored Conference: Developments in Alternative Finance in Birmingham UK on 26-27 June of 2019, the European Financial Management Association 2019 Annual Meeting in Portugal on 26-29 June, and at the 2019 Entrepreneurial Finance (ENTFIN) in Trier Germany on 2-4 July 2019 for their valuable feedback. We gratefully acknowledge support from the Research Seed Corn funding 2019 , from the University of Bath School of Management , United Kingdom.

Funding Information:
We are very grateful to the editors Douglas Cumming and Bart Lambrecht, the guest editors Sofia Johan and Hisham Farag, and the three anonymous reviewers at the Journal of Corporate Finance whose detailed and constructive comments sharply improved the overall exposition of the paper. We would also like to send special thanks to Alfred Lehar, Christian Fisch, Michal Kosinski, Tom R Vanacker, Michele Meoli, and the seminar participants at the Birmingham Business School and the Journal of Corporate Finance Co-sponsored Conference: Developments in Alternative Finance in Birmingham UK on 26-27 June of 2019, the European Financial Management Association 2019 Annual Meeting in Portugal on 26-29 June, and at the 2019 Entrepreneurial Finance (ENTFIN) in Trier Germany on 2-4 July 2019 for their valuable feedback. We gratefully acknowledge support from the Research Seed Corn funding 2019, from the University of Bath School of Management, United Kingdom.

Keywords

  • Alternative finance
  • Capital raising
  • Confidence
  • ICOs
  • Initial coin offerings

ASJC Scopus subject areas

  • Business and International Management
  • Finance
  • Economics and Econometrics
  • Strategy and Management

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