The quest for trust in decentralised finance: Screening ownership in high tech start-ups

By building on the role of trust in finance and screening theory, our research explores the correlation between founders occupying leadership positions such as CEO, CTO, or CFO and the funds raised through Initial Coin Offerings (ICOs). Our analysis of data from 2,047 ICOs conducted between 2017 and 2021 reveals that founders occupying positions of authority within their organisations are perceived by investors as a signal of commitment. This perceived commitment enhances investor trust in the venture, which, in turn, leads to increased funding raised during the ICO. Furthermore, our analysis highlights the crucial role of the CTO in building trust and investors’ preference for multiple founders occupying leadership roles simultaneously. Our conclusions are robust to potential biases and endogeneity.