Only someone who’s prepared to take some risks can be a successful startup entrepreneur. But this ability has little to do with courage.
What qualities do most entrepreneurs share? Entrepreneurship? Persuasiveness? Organizational skill? Certainly these are part of the mix. But there’s something else most successful entrepreneurs have in common: nearly all of them grew up in relative ease and never had to worry about money. This is what makes people – so we often hear – more willing to take the risk of starting a company. The notion is controversial, but has recently been confirmed in several representative studies by reputable universities.
Persuasiveness? Organizational skill? Above all, money to spare!
Ross Levine and Rona Rubenstein of the University of California are among those who’ve reached this conclusion. These researchers noted that most entrepreneurs in their study were white, male and came from at least an upper middle class home.
Another study looked at people’s inherent openness to risk. The team led by Sandra E. Black and Paul J. Devereux at the US National Bureau of Economic Research examined in this context what kinds of people are particularly active in making personal investments on the stock exchange. Their results indicate that they are mainly the shareholders who rank among the highest earners. Equally interesting is data from the Global Entrepreneurship Monitor , which shows that some 80 percent of new business financing comes from the founders’ personal savings or in the form of loans from their circle of family and friends. This too clearly indicates that it’s the haves who can do.
Money provides people with a sort of psychological resiliency that gives them the confidence to overcome or dismiss possible difficulties.
Frequently, founders of successful startups have already launched less successful companies that eventually went under. Only people with a secure safety net can see past such a failure and learn from the experience to do better next time.
Whether their strengths involve risk readiness, creativity or perseverance, more than 200 young entrepreneurs are bringing their business ideas to SCALE11 at CeBIT next March. They are sure to offer tips to anyone who has an idea but hasn’t started their own company yet.