HKBU School of Business's new study shows online crowdfunders more often back Kickstarter entrepreneurs with trustworthy-looking faces
Over the past few years, online crowdfunding has shown that it is a viable fundraising mechanism that is here to stay. Platforms like Kickstarter have become a magnet for entrepreneurs looking to market their concepts and raise capital. While much attention goes into the presentation and explanation of the product, a new study from Dr. Yang Duan and Dr. Ray Wang of Hong Kong Baptist University (HKBU) School of Business, Tien-Shih Hsieh of University of Massachusetts Dartmouth, and Zhihong Wang of Clark University examines a seemingly novel idea - do people fund crowdfunding campaigns based on how trustworthy the entrepreneur looks? Is an entrepreneur's face essentially the key to crowdfunding success?
Using photos of entrepreneurs who launched Kickstarter campaigns, the study constructed a comprehensive facial trustworthiness index by employing machine learning-based facial detection techniques. Through this, researchers see that facial trustworthiness - a funder's perception of an entrepreneur's ability, benevolence, and integrity based on the entrepreneur's facial features - certainly influences funding decisions. Here are some of the ways it impacts the crowdfunding decision-making process:
The more you look the part, the more likely you are to get the funds - The study found that entrepreneurs who look more trustworthy are more likely to have their campaigns funded. Positive facial trustworthiness impacts both quality AND quantity - not only do "more trustworthy" appearing entrepreneurs receive more in pledged amounts, they attract more funders overall.
Facial trustworthiness matters more for female entrepreneurs, and trust is more important than attractiveness - Facial trustworthiness plays a more important role in determining the crowdfunding success of female entrepreneurs versus their male counterparts. While some may argue that perceived attractiveness - and not trustworthiness - may be playing a role behind-the-scenes, the study tested for this and found that facial attractiveness didn't significantly impact crowdfunding success.
A trustworthy-looking face helps funders feel better about the overall project - Facial trustworthiness does alleviate funders' concerns about crowdfunding uncertainty. These perceptions can be key to the decision-making process in an investment environment where other project-related information is limited.
Facial trustworthiness is a thing, but some common truths remain - Projects with lower fund-raising goals and longer durations are more likely to be successfully funded, and entrepreneurs who include a video presentation have higher success rates as this signals both high quality and preparedness - elements that build trust.
While it may seem superficial to have one's face sway potential crowdfunders, the study shows that the success of Kickstarter crowdfunding efforts don't always have to do with the quality of a project - people need to be won over with trust. By simply looking the part of a trustworthy entrepreneur, people may be able to mitigate shortfalls in other areas - a trustworthy-looking face can seal the deal.
SOURCE: Hong Kong Baptist University