In an era where social media permeates almost every facet of professional and personal life, the ramifications of CEOs’ online presence on their companies’ financial trajectories have become a critical subject of inquiry. Recent research presents a nuanced understanding of how CEOs’ social media engagement influences the capacity of their firms to secure subsequent rounds of financing. Contrary to some prior studies suggesting that active social media usage by CEOs might bolster firm prospects, new evidence indicates a predominantly negative correlation with financing success, yet this effect is not uniform and is moderated by several key factors.
The core finding reveals that CEOs’ use of social media, particularly platforms with high entertainment orientation, can undermine investor confidence, thereby decreasing the probability of raising additional funds. This revelation challenges the conventional wisdom that a CEO’s visible personal brand invariably benefits the company’s capital-raising efforts. Social media’s ornamental features—multimedia content, informal tone, and interactive but often superficial engagement—may render CEO messages less credible or professional from an investor standpoint. These perceptions can overshadow the strategic intent behind the posts, leading to mixed or even adverse effects on financing outcomes.
A more intricate picture emerges when considering moderating influences like the CEO’s regulatory focus—specifically a promotion-oriented mindset—social media follower count, and the firm’s business model classification, particularly whether it operates in a business-to-consumer (B2C) context. A promotion focus reflects a CEO’s forward-looking, opportunity-seeking attitude, which seems to reshape the narrative conveyed on social media, making it resonate better with investors. Similarly, a substantial follower base amplifies the CEO’s social capital, signaling credibility and influence that may counteract the inherent downsides of social media’s entertainment framing.
The B2C business model adds another layer of complexity. Firms directly interacting with consumers benefit from CEOs’ social media because these platforms facilitate authentic, two-way communication that aligns well with marketing and brand-building efforts. Through personal storytelling and engagement, CEOs can create emotional bonds with consumers, enhancing brand loyalty and driving sales. However, this direct consumer engagement rarely translates to increased investor trust, as financial backers prioritize professionalism, stability, and risk mitigation over emotional appeal.
This divergence between sales and financing outcomes underscores fundamental differences in decision-making processes. Consumer purchases are often impulsive and emotionally charged, leveraging the immediacy and intimacy of social media channels. Investors, in contrast, rely on rational analyses, scrutinizing firm performance, strategic vision, and growth potential with a critical eye that social media content may fail to satisfy. CEO social media activity, especially when skewed toward entertainment or personal expression, may inadvertently dilute the perceived seriousness of the firm, thus alienating prospective investors.
Significantly, these findings diverge from earlier research, notably that by Jin et al. (2017). The divergence is partly attributable to the social media platforms analyzed. Whereas previous studies focused on Twitter, predominantly a text-driven, global platform, this research investigates Sina Weibo—China’s premier social media site characterized by rich multimedia usage, a largely domestic user base, and distinct regulatory controls affecting content dissemination and user behavior. Such platform-specific differences have profound implications for how CEO social media usage is perceived by various stakeholder groups.
Moreover, the scope and demographic composition of firms studied differ considerably. Jin et al. concentrated primarily on technology-focused firms, which often have distinct investor communities attuned to digital innovation and celebrity status. Conversely, the current study samples a wider range of industries, broadening the contextual framing and revealing that the negative relationship between CEO social media activity and financing is more pervasive across sectors, particularly where emotional and consumer engagement elements are less relevant.
Beyond unpacking the impact of CEOs’ social media usage on financing, the study offers deeper insights into the communication dynamics at play. Social media functions as an interactive channel enabling immediate feedback and bidirectional dialogue. For CEOs, this means social media is not merely a broadcasting tool but a platform for relationship building—particularly with consumers. This capacity aligns with consumer preferences for transparency and authenticity, further elucidating why social media engagement can buttress sales outcomes even as it complicates investment dialogues.
From a theoretical perspective, these results underscore the importance of upper echelons theory, which posits that organizational outcomes are strongly influenced by the personal characteristics, values, and experiences of top executives. Social media amplifies this CEO effect by extending their personal influence well beyond traditional boundaries, fostering unique interpersonal ties that resonate through organizational strategies and market perceptions.
Despite the challenges posed by social media for financing success, the study delineates specific conditions under which the negative impact is attenuated. CEOs with a promotion focus tend to craft social media communications that underscore growth potential, innovation, and forward momentum—attributes appealing to investors. Coupled with a sizable and engaged follower base, this strategy reinforces a perception of credibility and leadership capacity. Furthermore, firms operating in B2C markets benefit from the natural congruence between social media’s communicative style and the needs of consumer engagement, thereby mitigating financing drawbacks.
These findings carry important implications for corporate managers and CEOs navigating the social media landscape. Rather than discouraging social media usage outright, companies should encourage strategic, disciplined engagement that foregrounds professional achievements and corporate narratives over entertainment or personality-driven content. Authenticity remains vital, but should be channeled through a lens that aligns with investor expectations and corporate governance standards.
CEOs are advised to cultivate their personal brands with an emphasis on thought leadership and business acumen. Engaging followers with substantive posts related to company strategy, market trends, and innovation can build social capital conducive to attracting investor interest. Importantly, CEOs should resist the allure of mimicking entertainment formats popular on social media that could inadvertently erode perceived professionalism.
B2C firms, in particular, can leverage social media more aggressively as a platform to humanize their brands and foster direct consumer relationships. Sharing customer success stories, CEO insights, and company impact narratives resonates well with consumers and can translate into tangible marketing and sales benefits. Yet, even in these sectors, managers must balance consumer engagement with maintaining investor confidence through measured and strategic communication.
Investors similarly benefit from understanding the nuanced signals conveyed by CEOs’ social media activity. Recognizing that entertainment-oriented content may skew perceptions, investors are encouraged to look beyond superficial social media impressions and examine how CEO personality traits intersect with firm performance metrics. This approach can help discern genuine leadership quality and mitigate risks arising from misinterpretations of online presence.
From a practical standpoint, the study advocates the development of training programs tailored to CEOs that highlight the complexities and consequences of their social media actions. Educating CEOs on how to craft messages that resonate with both investors and consumers, while preserving alignment with overall corporate strategy, emerges as an essential step toward optimizing social media’s role in financing outcomes.
Companies are also advised to implement comprehensive social media strategies that explicitly incorporate the CEO’s role. Balancing the CEO’s regulatory focus, company business model, and target audience ensures that social media efforts support rather than undermine corporate financing objectives. Monitoring social media metrics such as engagement rates, follower growth, and sentiment analysis allows real-time adjustments that can enhance effectiveness.
Importantly, the study cautions against the pitfalls of excessive reliance on social media or blind imitation of industry trends without strategic fit. Social media management demands substantial time and energy, potentially distracting CEOs from core leadership responsibilities. Moreover, short-term spikes in social media attention may create reputational risks if personal comments or actions provoke negative public responses, thereby harming long-term investor relations.
In conclusion, while CEOs’ social media usage introduces complexities into the financing equation, it is neither inherently beneficial nor detrimental. Its impact hinges on the interplay of CEO traits, follower dynamics, and business context, suggesting that social media is best viewed as a strategic tool requiring careful, context-sensitive management. As firms continue to navigate the digital age, understanding these subtleties will be vital for harnessing social media’s potential without jeopardizing essential investor trust.
Subject of Research:
The investigation centers on the influence of CEOs’ social media activity on their companies’ ability to raise subsequent rounds of financing, examining moderating factors such as CEO promotion focus, follower count, and business model orientation.
Article Title:
Opportunity or nonsense? Examining the role of CEOs’ social media usage in raising funds.
Article References:
Zhang, R., Cheng, M., Wang, Y. et al. Opportunity or nonsense? Examining the role of CEOs’ social media usage in raising funds. Humanit Soc Sci Commun 12, 1190 (2025). https://doi.org/10.1057/s41599-025-05522-3
Image Credits: AI Generated
