Anatomy of an Entrepreneur

Do you know what is the Family Background or Motivation of Typical Entrepreneur?

Here is your Typical Entrepreneur

• He is from a middle-class or upper lower-class background, and very few come from backgrounds of extreme wealth or extreme poverty.
• He is usually well educated, with only 5 percent or less having a bachelor’s degree.
• He likely to be better educated than their parents were, with half his fathers and a third of their mothers having at least bachelors’ degrees.
• He performed well in high school and in college, with the vast majority ranking average or above in their respective institutions.
• He necessarily does not come from families of entrepreneurs; slightly more than half are the first in their families to launch businesses.
• On average, he tends to be the middle child in a three-child household.
• He is significantly more likely to be married and have children when they launch their first businesses.
• He is far more likely to have worked for an employer for more than six years than to have quickly launched their own businesses.
• His primary motivation for launching a business are to build wealth, to own his own company, and to capitalize on a business idea that he has.

These are the findings of a report authored by Vivek Wadhwa, Raj Aggarwal, Kristina Holly and Alex Salkever for Ewing Marion Kauffman Foundation(released by PEHUB.)

When I read the survey, I felt like it was my bio, except that I was an average student in my college, all the facts relate to me completely !!

Here are some of the Highlights of the report “Anatomy of an Entrepreneur: family Background & Motivations”

Company founders tend to be middle-aged and well-educated, and did better in high school than in college

• The average and median age of company founders in our sample when they started their current companies was 40. (This is consistent with our previous research, which found the average and median age of Technology company founders to be 39).
• 95.1 percent of respondents themselves had earned bachelor’s degrees, and 47 percent had more advanced degrees.
• 75 percent ranked their academic performance among the top 30 percent of the high school class, with a majority (52.4 percent) ranking their performance among the top 10 percent.
• 67 percent ranked their academic performance among the top 30 percent of their undergraduate class, but a smaller percentage (37.5 percent) ranked their performance among the top 10 percent.

These entrepreneurs tend to come from middle-class or upper-lower-class backgrounds, and were better educated and more entrepreneurial than their parents

• 71.5 percent of respondents came from middle-class backgrounds (34.6 percent upper-middle class and 36.9 percent lower-middle class). Additionally, 21.8 percent said they came from upper-lower-class
  families (blue-collar workers in some form of manual labour).
• Less than 1 percent came from extremely rich or extremely poor backgrounds
• The average birth order of respondents in their family was 2.2 and the average number of siblings was 3.1.
• The fathers of 50.1 percent of the company founders held bachelor’s or advanced degrees, as did 33.9 percent of the mothers.
• More than half (51.9 percent) of respondents were the first in their families to launch a business. Only 38.8 percent, 6.9 percent, and 15.2 percent, respectively, had a father, mother, or siblings who had previously started businesses.

Most entrepreneurs are married and have children

• 69.9 percent of respondents indicated they were married when they launched their first business. An additional 5.2 percent were divorced, separated, or widowed.
• 59.7 percent of respondents indicated they had at least one child when they launched their first business, and 43.5 percent had two or more
  children.

Early interest and propensity to start companies

• 52 percent of respondents had some interest in becoming an entrepreneur when they were in college, but 34.7 percent didn’t even think about it, and 13.3 percent had little or no interest. Those from lower-upper-class backgrounds were more likely to have been extremely interested in starting a business than the average (25 percent vs. 18.5
  percent).
• Of the 24.5 percent who indicated that they were “extremely interested” in becoming entrepreneurs during college, 47.1 percent went on to start more than two companies (as compared to 32.9 percent of the overall sample).
• The majority of the entrepreneurs in our sample were serial entrepreneurs. The average number of businesses launched by respondents was approximately 2.3; 41.4 percent were starting their
  first businesses.

Motivations for becoming entrepreneurs: building wealth, owning a company, startup culture, and capitalizing on a business idea

• 74.8 percent of respondents indicated desire to build wealth as an important motivation in becoming an entrepreneur. This factor was rated as important by 82.1 percent of respondents who grew up in “lower-upper-class” families.
• 68.1 percent of respondents indicated that capitalizing on a business idea was an important motivation in becoming an entrepreneur.
• 64.2 percent of respondents said they have always wanted to own their own companies. This was a stronger factor for those from lower-upper-class backgrounds—78.6 percent ranked this as important.
• 66.2 percent said the appeal of a startup culture was an important motivation.
• 60.3 percent said that working for others did not appeal to them. Responses to this question were relatively evenly distributed in a rough bell curve, with 16 percent of respondents citing this as an
  extremely important factor and 16.8 percent of respondents citing it as not at all a factor.

Not important or less-important factors: inability to obtain employment or encouragement from others

• 80.3 percent of respondents stated that inability to find traditional employment was not at all a factor in starting their own businesses. Only 4.5 percent said this was an important factor.
• 37.8 percent of respondents said the role played by an entrepreneurial friend or family member was an important factor. A co-founder’s encouragement was important for 27.9 percent of the respondents.
• 18.1 percent had developed a technology they wanted to commercialize.

Most had significant industry experience when starting their companies.

• The majority of respondents (75.4 percent) had worked as employees at other companies for more than six years before launching their own companies. Nearly half (47.9 percent) launched their first companies with more than ten years of work experience.
• Significant percentages of respondents started their first companies after working eleven to fifteen years (23.3 percent), sixteen to twenty years (14.3 percent), or greater than twenty years (10.3 percent) for someone else.

Early entrepreneurs and those with an early interest in entrepreneurship are different

• Entrepreneurs who started their companies soon after graduating (with zero to five years of work experience) and those who had an extremely strong interest in entrepreneurship in college were far less likely to be married (36.6 percent vs. the total sample average of 69.9 percent) or to have kids when they launched their first businesses (26.9 percent vs. the total sample average of 59.6 percent).
• Those who were “extremely interested” in starting a company while in college were far more likely to be early entrepreneurs. Of these entrepreneurs, 69 percent started their companies within ten years
  of working for someone else (as compared to 46.8 percent from the rest of the population).
• Level of interest in entrepreneurship during college was correlated to the number of years worked before starting a business—only 18 percent from the “extremely interested” group worked for at least fifteen years before starting their own businesses, as compared to 46.4 percent from the “not very interested” group.

One of the very interesting and relevant reports that I have read.

Here is the full Report (If you are reading through RSS reader or mail, Please click the title of the post to see)