In sales, you’re often selling yourself as much as you’re selling the product — and new research published in the Strategic Entrepreneurship Journal suggests the same holds true for IPOs. Specifically, researchers found that more charismatic CEOs can lead to higher IPO prices and smaller offer price ranges for their firms.

“The common theme we’re starting to see is that investors are not investing just in the idea, they’re also investing in the person,” says study co-author Oleg Petrenko, an assistant professor at Walton College of Business at the University of Arkansas. “We need to better understand the effects of these personality traits that entrepreneurs have, how it affects the way they make decisions, the way they run their firms, and — ultimately — the success of these new ventures.”

The research team wanted to study how CEO humility affected investors’ perception of the executives, and thus affects the IPO valuation. The team focused on IPO roadshows, when CEOs need to be cheerleaders for both the firm and their own abilities to win over investors. The researchers used a videometric technique for the study, with trained psychologists observing CEOs as they gave interviews and speeches during IPO roadshows.

The research team then compared the personality evaluations with the firms’ IPO performance, finding that those perceived as more humble resulted in more underpricing by investors and to a bigger spread in prices. “Our main findings indicate that the CEOs basically need to keep their humility in check,” Petrenko says. “There are good things that come out of humility, but in this specific context, when they’re taking their firm through the IPO process, they need to be a little bit less humble.”

Strategic Entrepreneurship Journal, published by the Strategic Management Society, publishes the most influential, managerial-oriented research on global strategy.

Published Date
04 January 2023


Chandler, J. A., Petrenko, O. V., Hayes, N., Blake, A. B., & Aime, F. (2022). Do the personal attributes of CEOs matter in the IPO pricing process? An examination of charmisma and humility. Strategic Entrepreneurship Journal.

Written By

Sarah Steimer

Article Type
Article Press Release, Article Summary/Abstract


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