From Traits to Teams: How Founder Personality Shapes Innovation in New Ventures
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This study explores which founder personality traits contribute to the innovativeness of new firms, with a particular emphasis on understanding how diversity in the founding team mediates this relationship. In a sample of 2,169 young German firms between 2011 and 2022, our results show that founder personality and team diversity affect firm innovativeness. Openness to new experiences and agreeableness have a significantly positive influence on innovation input and output, whereas conscientiousness has a negative effect. Demographic, educational, and professional diversity within founding teams are positively associated with firm innovativeness. Age, gender, and nationality diversity are positively associated with conscientiousness and negatively with extraversion and agreeableness. Team diversity only modestly mediates the effects of founder personality, often opposing their direct impacts. These findings provide theoretical and practical insights into how personality profiles shape founding teams and firm innovation. Young firm innovation can be enhanced by balancing personality-driven biases and encouraging diversity-conscious teams.
