Founder Personality and Start-up Subsidies

Start-up subsidies play an important role in supporting start-up innovation and performance. However, what characteristics help and hinder start-ups to seek public subsidies remains unclear. We study whether and how founder personality links to entrepreneurs’ seeking of start-up subsidies. We argue that greater founders’ openness, extraversion, and entrepreneurial orientation enhance seeking of start-up subsidies, while greater founders’ agreeableness, conscientiousness, and neuroticism inhibit it. Additionally, we argue that entrepreneurial orientation plays a mediating role in the relationship between big five personality traits and start-up subsidies. We find evidence for a positive role of founder entrepreneurial orientation. While we find little evidence for a direct association between founders’ big five personality and subsidies, we document an indirect link through entrepreneurial orientation. We also show that personality is not associated with bank financing and borrowing from family and friends while the patterns for venture capital financing are similar to those for subsidies.