Who Entrepreneurs Are and What
Makes Them Tick - sourced from business week.com
In 2004 small companies employed about half of the private-sector work
force and generated about half of the nonfarm private gross domestic
product in the U.S., according to the Small Business Administration.
Despite their enormous impact on the economy, little is known about
entrepreneurs' backgrounds or motivations, beyond myths that cast them
as privileged young workaholics chasing fame and fortune.
A study released by the Kauffman Foundation earlier this month, titled
“The Anatomy of an Entrepreneur,” led by co-authors Vivek Wadhwa, Raj
Aggarwal, Krisztina “Z” Holly, and former BusinessWeek tech editor Alex
Salkever aims to discover who American entrepreneurs are and what
makes them tick. To do so, the team surveyed 549 successful business
founders from high-growth industries between August 2008 and March
2009. Flip through this slide show for Wadhwa's thoughts on the most
Not College Dropouts
tend to be highly
found that 95%
degrees and 47%
Better Educated Than Their Parents
Their parents weren't nearly as well-educated. Only half the
company founders' fathers and only 34% of the founders'
mothers held bachelor's or advanced degrees.
Ranked at the Top of Their Class in
ranked their academic
the top 30% of the
high school class, with
a majority (about 52%)
the top 10%
..But Drank Their Way Through
They didn't do as well in
college, however. Sixty-
seven percent ranked their
among the top 30% of
their undergraduate class,
and a smaller percentage
(37.5 %) ranked their
performance among the
top 10 percent
Not from Rich Families
Most of the company
founders came from middle-
class backgrounds (35%
described themselves as
upper-middle class and 40%
as lower-middle class).
Additionally, 22% said their
parents were blue-collar
workers engaged in some
form of manual labor.
Less than 1% came from
extremely rich or extremely
The average company founder was not the
Not the Only Child
Company founders tend to come from fairly large
families, with an average of three siblings.
About 70% of
indicated they were
married when they
launched their first
additional 5.2% were
Nearly 60% of company founders indicated they had at
least one child when they launched their first business,
and 43.5% had two or more children.
Entrepreneurship Didn't Always Run in
Just over half of the respondents were not children of entrepreneurs
Many Caught the Entrepreneurial Bug Later
While half of the company founders had some interest in becoming an entrepreneur
when they were in college, more than a third didn't even think about it, and just over
13% had little or no interest. Those from blue-collar backgrounds were more likely to
have been extremely interested in starting a business.
Most Had Relevant Industry Experience
The majority of company founders (over 75%) had worked as
employees at other companies for more than six years before
launching their own companies. Nearly half launched their first
companies with more than 10 years of work experience
They Could've Landed Jobs But Didn't
Founders weighed in on a scale of 1 through 5, with 1 meaning not an important
factor and 5 meaning an extremely important factor.
It wasn't that they couldn't get jobs. Over 80% of company founders said that
inability to find traditional employment was not a factor in starting their own
businesses. Only 4.5% said it was an important factor.
So why did they start companies? Just under 75% said their desire to build wealth
was important; 64% said they have always wanted to own their own companies;
66% liked the appeal of a startup culture; and 60% said that working for others did
not appeal to them
Once an Entrepreneur, Always an Entrepreneur
A majority (over 58%) started more than one company. Eight
percent of the company founders had started more than five