Imagine you are an investor scrolling through a startup database, looking at founder profiles for the first time. Two companies have similar business plans, similar team sizes, and operate in the same industry. The only visible difference? One founder is smiling in their photo, and the other is not. Would that small detail change your willingness to invest?
According to a series of five studies published in Scientific Reports, the answer appears to be yes. Researchers found that founders who smile in their profile photos and during pitches are associated with higher levels of investor trust and better funding outcomes. In a controlled experiment with professional venture capitalists, smiling founders were valued at $2.1 million more than their non-smiling counterparts.
The question behind the research
Entrepreneurs seeking outside money have always needed to do more than just present a good business plan. They also need to convince investors that they are trustworthy and capable of using the capital wisely. In an era where many first impressions happen through a screen, whether on an investor database, a video call, or a pitch deck, nonverbal cues like facial expressions take on added significance.
Previous research had already shown that nonverbal behavior, such as gestures and voice intensity, can influence how investors evaluate startup pitches. Some studies in crowdfunding had linked facial expressions of joy with better funding results. But most of this work relied on observational data from crowdfunding platforms, which are quite different from the high-stakes environments where angel investors and venture capitalists operate. And an open question remained: does smiling actually cause investors to be more willing to invest, or is something else going on?
Dimosthenis Stefanidis of the University of Cyprus, along with colleagues at the University of Warwick, Case Western Reserve University, and London Business School, set out to answer two specific questions. First, does a founder’s smile cause investors to increase their willingness to invest? Second, if so, is this effect driven by the fact that smiling makes founders appear more trustworthy?
Five studies, three different settings
The research team designed a multi-study approach that moved from initial interviews to large-scale data analysis to a controlled experiment. Two pilot studies laid the groundwork. In the first, the team conducted interviews with 10 early-stage investors from the United States, the United Kingdom, Israel, Ireland, and Greece. Eight out of ten investors said they preferred founders who smile, and six explicitly said that smiling made entrepreneurs appear more trustworthy.
The second pilot involved a randomized experiment with 210 entrepreneurs and prospective entrepreneurs recruited from university-affiliated incubators in Sweden. Participants were randomly assigned to watch a 75-second pitch video delivered by either a smiling or a non-smiling entrepreneur. Those who watched the smiling version rated the entrepreneur higher on trustworthiness, which is defined in the study using the Ability-Benevolence-Integrity framework. This framework breaks trustworthiness into three components: whether someone seems competent, whether they seem well-intentioned, and whether they seem honest.
The first main study analyzed a large dataset of 20,316 U.S.-based ventures listed on Crunchbase, a widely used startup database. The researchers used a facial recognition tool called Face++ to measure how much each founder was smiling in their profile photo, generating a score between 0 and 1. After controlling for factors such as industry, founder gender, geographic location, founding year, team size, and number of employees, the analysis found that a one-unit increase in the smiling score was associated with an additional $3.4 million in funding raised.
The second main study turned to Shark Tank, the popular television show where entrepreneurs pitch to a panel of five investors. The team built a dataset of 1,091 pitches, extracting over 670,000 individual video frames and using computer vision to measure each entrepreneur’s average smiling intensity throughout their pitch. After accounting for variables like age, gender, ethnicity, industry, revenue, patents, and debt, the researchers found that a standard deviation increase in the smiling score was associated with 1.47 times higher odds of receiving funding. To examine the role of trust, the team used a deep learning model that analyzed the investors’ spoken words during the pitch to estimate how much trust the investor expressed toward the entrepreneur. The results suggested that perceived trustworthiness helped explain the link between smiling and funding, although the statistical evidence on this particular step was only marginally significant, meaning it should be interpreted with caution.
The experiment that tested causation
The third and final main study was designed to establish a causal relationship rather than just an association. The researchers recruited 51 professional venture capitalists whose funds managed an average of $372 million. Each investor reviewed 10 real pitch decks that had been modified in only one way: the team photos were swapped between smiling and non-smiling versions of the same individuals. Everything else, including the business narrative, projected financials, and product descriptions, remained identical.
Each venture capitalist saw only one version of each pitch deck, either smiling or non-smiling, randomly assigned. This design prevented investors from guessing that facial expression was the variable being tested. A separate group of 72 people confirmed in a manipulation check that they could notice the difference in happiness between the two photo conditions.
The results were striking. Pitch decks featuring smiling founders were associated with a 16.6 percentage point higher estimated probability of a successful exit, meaning an acquisition or initial public offering. Venture capitalists valued the smiling companies $2.1 million higher on average and rated them 2.4 points higher on a seven-point scale measuring overall investment attractiveness. Analysis showed that trustworthiness accounted for 27% of the effect on exit probability estimates, 36% of the effect on valuation, and 66% of the effect on venture attractiveness ratings. In other words, smiling led investors to perceive founders as more trustworthy, and that increased perception of trustworthiness, in turn, led to more favorable investment assessments.
What this means for founders and investors
The practical takeaway from this research is straightforward: entrepreneurs seeking funding may benefit from smiling in their profile photos and during their pitches. Smiling appears to function as a nonverbal signal that helps establish trustworthiness, which is especially important in early-stage investment settings where investors have limited information to work with.
For investors, the findings serve as a reminder that nonverbal cues can influence their decision-making in ways they may not fully recognize. While trustworthiness is clearly important in assessing a startup founder, investors may want to be aware that facial expressions can shape their trust perceptions independent of a venture’s actual merits.
Important caveats to keep in mind
The study comes with several limitations worth noting. The Crunchbase analysis relies on static profile photos, and the researchers cannot confirm whether investors actually saw those specific images before making funding decisions. Crunchbase data is also crowd-submitted and may contain inaccuracies. The Shark Tank data involves a televised and edited show, meaning footage may emphasize certain moments and omit others. The entrepreneurs who appear on Shark Tank are not a representative sample of startup founders, as they were selected partly for entertainment value. And the show’s celebrity investors have different incentives than typical venture capitalists.
The controlled experiment with 51 venture capitalists provides the strongest evidence for a causal effect, but the sample size is relatively small, and the researchers acknowledge that recruiting a truly random sample of venture capitalists is difficult given the time pressures of the industry. The pilot study with entrepreneurs and prospective entrepreneurs used a proxy population rather than actual professional investors.
Additionally, trustworthiness did not fully account for the effect of smiling on funding outcomes. The researchers note that future work should explore other pathways through which smiling might benefit entrepreneurs. Longitudinal studies tracking investor-entrepreneur relationships over time could also reveal whether the impact of a first-impression smile holds up as the relationship develops.
Still, across three very different empirical settings, including a startup database, a pitch competition television show, and a controlled experiment, the pattern pointed in the same direction: founders who smile tend to fare better with investors, and perceived trustworthiness appears to be a significant part of the reason why.
