Do I have a big ego? Angel investors' narcissism and investment behaviors

In this study, we draw on the threatened egotism theory to examine the effect of angel narcissism on their investment behaviors and the boundary condition of past investment performance. We propose that angel narcissism is positively related to deal size and portfolio industry diversification but negatively related to the number of co-investors. Moreover, past investment performance moderates these relationships such that the effects of angel narcissism on their investment behaviors are stronger when past investment performance is lower. Data from a longitudinal analysis of 133 angels from 2010 to 2019 largely supported our hypotheses. Our study, the first to examine angel narcissism, highlights the psychological foundation of angel investing. •We draw on the threatened egotism theory to examine the effect of angel narcissism on angels’ investment behaviors and the moderating role of past investment performance.•We propose that angel narcissism is positively related to deal size and portfolio industry diversification but negatively related to the number of co-investors.•We propose that the effects of angel narcissism on their investment behaviors are stronger when past investment performance is lower.•We find that, compared with an angel with a minimum narcissism score, an angel with a maximum narcissism score engages in investments with $4.2 million more, is 21.1 % more likely to diversify into different industries, and is 30.2 % less likely to have co-investors.•We find that when past investment performance was low, an angel with a maximum narcissism score engages in investments with $2.9 million more and is 33.4 % more likely to diversify into different industries, compared with an angel with a minimum narcissism score.