5 Risky Personality Traits Common in Entrepreneurs. Do You Have One of Them? These are the founders who can blindsight investors and provide disappointing returns.

By Nitin Kumar

Opinions expressed by Entrepreneur contributors are their own.

Starting a business is a challenging endeavor that requires a combination of skills, traits and resources. While many entrepreneurs have what it takes to succeed, some founders may not make it due to certain personality traits that hinder their ability to lead and grow their businesses.

This article will explore five common traits that can doom a founder's chances of success. By understanding these traits, investors can avoid falling into the same traps and do some self-reflection for aspiring entrepreneurs.

Related: Focus on These 5 Traits to Help You Stand Out as a Leader

1. The risk-averse hobbyist

While having a side hustle or hobby is a great way to generate extra income on the side or pursue a passion, it is not enough to develop confidence from angels and VCs. I have had so many folks approach me over the years for an angel or VC investment but will not risk leaving their jobs until funding arrives.

This is not only unviable but sends an insulting message to investors that "your money is at risk, not my life." If there is no risk appetite or skin in the game, entrepreneurs will run for safety nets and even abandon ship (as observed many times).

While a side hustle or hobby may generate some revenue, it may not have the scalability or potential for growth that investors are looking for. Being an entrepreneur or startup founder is also not for everyone. Hence, if you are trying to turn your side hustle or passion into a business, plan to do it without funding. If your current job's safety net is more important than your startup passion, then you are not ready to be a startup founder.

Related: How Finding a Hobby Will Make You A Better Entrepreneur

2. The name dropper

Those with real networks bring them to the table and create value from them for themselves and others. People who drop names to prove a point do not have scalable networks or maybe overplay one or two relationships they might have.

Name droppers usually come with a lot of baggage and are out to prove a point that because of whom they know, the value will be automatically generated, a misguided thought and path to pursue. It takes years of personal branding, trust, effort, and walking the streets to build effective and influential networks, and people who appreciate the hard work it takes to develop and maintain networks seldom drop names. Creating value in a business takes work and not names. If you see the name dropper, just run!

Related: How Networking Is Necessary for Effective Entrepreneurship

3. The narcissist

Many founders become attached to their vision and product and get defensive when others offer feedback or criticism. However, failing to get feedback can be detrimental to your business's success. Ignoring feedback can lead to missed opportunities for improvement and hinder your ability to grow and evolve your business.

Also, when founders don't take feedback, it can signal to investors and potential partners they are not open to collaboration or receptive to feedback, making it harder to attract the resources needed to scale the business. While it's challenging to hear feedback that may not align with your vision, it is crucial to stay open-minded and consider all perspectives to make informed decisions that will ultimately benefit your business. If you spot a narcissist, walk away.

Related: It's Not Always About You: Keep Your Entitlement In Check When Dealing With Small Businesses

4. The big company purist

Operating with a sense of entitlement and an asymmetric opinion of themselves, they are usually ready to roll but require an army of resources and a lot of time to understand that their self-image and life as an entrepreneur are different things. Many are good at providing theory, wisdom, and strategy but cannot execute frugally or even with minimal resources.

Although the ones who adapt have done spectacularly well, even if the majority fail, one must identify their self-drive and ability to execute at all scales. This includes the ability to be hands-on, the strength of their network to attract the right talent, credibility, personal brand and their ability to look forward while ignoring their past.

5. The logo chaser

The most convincing of the lot and perhaps the most dangerous as they take the investor down many rounds before, they understand the calamity. These entrepreneurs will chase any logo, customer, or traction, hacking their way through the product taking shortcuts, and adding technical debt. They operate on their own planes and think they are trying to do the right things for themselves and investors by generating customers and dollars.

They rarely pay much heed to critical items like the quality of revenue, product-market fit and respect for a product roadmap believing that technical hacks and roadmap shifting will one day magically auto-correct themselves. The result is a soft delay to a professional services valuation and a tech stack laden with expensive technical debt. The litmus test for these founders is to show them a big company logo and ask for customizations. Their response will reveal whether you stay as an investor or run!

Related: As Your Culture Goes, So Goes Your Company.

Concluding thoughts

Starting and scaling a business is not an easy task, and it requires a unique set of skills, traits and resources. However, certain personality traits can hinder a founder's ability to succeed, and investors should recognize and address them. From the hobbyist to the name dropper, the big company purist to the narcissist, and the logo chaser, these five dangerous founder types can spell disaster for any startup. However, by understanding these traits, founders can try to develop the self-awareness and skills needed to lead their businesses to success. Ultimately, successful entrepreneurship requires a willingness to learn, adapt, and grow, and by avoiding these common pitfalls, founders can increase their chances of building a thriving business.

Nitin Kumar

Entrepreneur Leadership Network® Contributor


Co-founder of zblocks and two-decade tech veteran, transformative CEO, and ex-Management Consulting Partner focused on the TMT sectors. Nitin has led hyper-scale organizations ($multi-billion P/L) and start-ups with international experience across all major markets (six continents).

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