Researcher ORCID Identifier

0009-0004-3911-4440

Graduation Year

2024

Date of Submission

4-2024

Document Type

Open Access Senior Thesis

Degree Name

Bachelor of Arts

Department

Psychology

Reader 1

Professor Ronald Riggio

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Terms of Use for work posted in Scholarship@Claremont.

Rights Information

© 2024 Ria Passi

Abstract

New ventures created by entrepreneurs are crucial to the economy and to the diffusion of innovative technologies. However, startups often operate in highly uncertain environments characterized by constrained resources, lack of established processes, and complex market dynamics. Despite surges in startup investment, the failure rate for new ventures remains high, making it crucial to understand the factors that can contribute to their success. This thesis explores how founder personalities, leadership styles, and cultivating psychological safety impact startup performance and growth trajectories. Founder personality traits like openness, agreeableness, and conscientiousness are positively associated with securing funding, achieving exit opportunities, and overall venture growth. In contrast, neuroticism appears detrimental to startup success. The findings also highlight the critical role of transformational leadership, where founders/CEOs exhibiting inspirational motivation, individualized consideration, and other transformational behaviors drive better performance compared to transactional styles. Creating an environment of psychological safety, where employees feel able to voice concerns, experiment, and learn from failures, emerges as another vital component. These insights can aid entrepreneurs to proactively nurture conditions that empower teams and foster growth. As startups are critical engines of innovation and economic vitality, improving knowledge in this area holds important implications and pushes for continued research in this field.

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