Emotions in New Venture Teams: Affects as Signals, Emotional Diversity, and Valuation Effects in Crowdfunded Projects

43 Pages Posted: 13 Jun 2022

See all articles by Paul P. Momtaz

Paul P. Momtaz

University of California, Los Angeles (UCLA) - Anderson School of Management; University College London Center for Blockchain Technologies

Date Written: May 25, 2022

Abstract

New Venture Teams' (NVTs') collective emotions impact startup valuations through their intensity and diversity. I identify NVTs' affective traits with artificial emotional intelligence by tracking 2,520 individuals across 165 NVTs during their Initial Coin Offerings (ICOs). The level of NVTs' negative affects correlates with lower valuations, while within-NVT emotional diversity has a value-increasing effect. Intuitively, negative affects are associated with traits that may be prejudicial in dynamic entrepreneurial markets, but could be valuable if balanced by opposite traits in emotionally diverse NVTs. Moderated mediation analyses suggest that NVT affects have pronounced direct valuation effects. Overall, I extend the focus of the affective entrepreneurship literature from the entrepreneur to the team level, introduce the concept of emotional diversity, and explore the role of emotions in entrepreneurial finance.

Keywords: Emotions, Affects, Diversity, Entrepreneurship, Entrepreneurial Finance, Initial Coin Offering, ICO, Tokens, Blockchain, Crowdfunding, Artificial Intelligence

JEL Classification: G30, L26, M12, M13, M14

Suggested Citation

Momtaz, Paul P., Emotions in New Venture Teams: Affects as Signals, Emotional Diversity, and Valuation Effects in Crowdfunded Projects (May 25, 2022). Available at SSRN: https://ssrn.com/abstract=4119886 or http://dx.doi.org/10.2139/ssrn.4119886

Paul P. Momtaz (Contact Author)

University of California, Los Angeles (UCLA) - Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

University College London Center for Blockchain Technologies ( email )

UCL CBT UCL Computer Science
Malet Place London WC
London, London
United Kingdom

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