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The complex role of narcissism in entrepreneurial success (and failure) – new research

A new study has revealed that narcissism could play a beneficial role in early-stage entrepreneurship – however, it could also damage businesses and have a negative impact.

Drawing from psychology and business theory, a journal paper, Grandiose narcissism and entrepreneurship: a conceptual framework and future research agenda, explores how narcissistic traits interact with key personality dimensions to influence entrepreneurial behaviour.

The study sheds light on both the productive and destructive sides of narcissistic entrepreneurs and their impact on business ventures.

Researchers from Loughborough University and Birmingham City University found that certain narcissistic traits – particularly extraversion and openness to experience – could give entrepreneurs a competitive edge in the startup phase.

These traits can drive innovation, fuel confidence during fundraising, and enhance networking activities.

However, the study also warns of potential long-term risks: traits like overconfidence, lack of empathy, and a need for control can damage relationships with investors, employees, and other stakeholders.

Professor Alexandros Psychogios, of Loughborough Business School, said: “This study looks at how narcissism – specifically, grandiose narcissism – affects entrepreneurs.

“It shows that some narcissistic traits, like being outgoing and open to new experiences, can help entrepreneurs succeed by improving networking, getting resources, and encouraging innovation.

“But it also points out that other traits, like taking big risks, lacking empathy, and managing people poorly, can harm a business.

“It’s important to understand both the positive and negative sides of narcissism. By doing so, business leaders and researchers can find ways to use the helpful traits while reducing the risks.

“This approach helps connect ideas from both psychology and business and highlights how managing personality traits wisely can lead to more successful and sustainable companies.”

The team, which also included Professor Javed Ghulam Hussain and Careen Angella Bailey, of Birmingham City university, also revealed interesting insights into entrepreneurial finance, suggesting that narcissistic entrepreneurs are more likely to prefer internal funding sources to maintain control and protect their egos.

By contrast, those with higher levels of openness and social engagement may feel more comfortable seeking external investment.

This paper contributes to a growing field of research at the intersection of psychology and business and highlights the need for more empirical studies on how personality affects entrepreneurial decisions, including funding preferences and team dynamics.

Key points:

  • Narcissistic traits can support early-stage entrepreneurial activities such as networking, product development, and fundraising.
  • Over time, these traits may lead to poor team management, high-risk decisions, and stakeholder conflict.
  • Narcissistic entrepreneurs tend to prefer internal financing to maintain control, but extraversion and openness may increase willingness to seek external funding.
  • The study calls for more research into how narcissistic tendencies evolve over the lifecycle of a business.

This conceptual framework offers valuable insights for startup incubators, educators, and venture capitalists aiming to better understand – and support – the psychology behind entrepreneurship.

ENDS

Notes for editors

Press release reference number: 25/69

Loughborough is one of the country’s leading universities, with an international reputation for research that matters, excellence in teaching, strong links with industry, and unrivalled achievement in sport and its underpinning academic disciplines.

It has been awarded five stars in the independent QS Stars university rating scheme and named the best university in the world for sports-related subjects in the 2025 QS World University Rankings – the ninth year running.

Loughborough is ranked 6th in The UK Complete University Guide 2025, 10th in the Guardian University League Table 2025 and 10th in the Times and Sunday Times Good University Guide 2025.
Loughborough was also named University of the Year for Sport in the Times and Sunday Times Good University Guide 2025 - the fourth time it has been awarded the prestigious title.

Loughborough is consistently ranked in the top twenty of UK universities in the Times Higher Education’s ‘table of tables’, and in the Research Excellence Framework (REF) 2021 over 90% of its research was rated as ‘world-leading’ or ‘internationally-excellent’. In recognition of its contribution to the sector, Loughborough has been awarded seven Queen's Anniversary Prizes.

The Loughborough University London campus is based on the Queen Elizabeth Olympic Park and offers postgraduate and executive-level education, as well as research and enterprise opportunities. It is home to influential thought leaders, pioneering researchers and creative innovators who provide students with the highest quality of teaching and the very latest in modern thinking.

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