Entrepreneurship

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"Entrepreneur" redirects here. Entrepreneurship_sentence_0

For other uses, see Entrepreneur (disambiguation). Entrepreneurship_sentence_1

Entrepreneurship is the creation or extraction of value. Entrepreneurship_sentence_2

With this definition, entrepreneurship is viewed as change, which may include other values than simply economic ones. Entrepreneurship_sentence_3

More narrow definitions have described entrepreneurship as the process of designing, launching and running a new business, which is often initially a small business, or as the "capacity and willingness to develop, organize and manage a business venture along with any of its risks to make a profit." Entrepreneurship_sentence_4

The people who create these businesses are often referred to as entrepreneurs. Entrepreneurship_sentence_5

While definitions of entrepreneurship typically focus on the launching and running of businesses, due to the high risks involved in launching a start-up, a significant proportion of start-up businesses have to close due to "lack of funding, bad business decisions, government policies, an economic crisis, lack of market demand, or a combination of all of these." Entrepreneurship_sentence_6

A somewhat broader definition of the term is sometimes used, especially in the field of economics. Entrepreneurship_sentence_7

In this usage, an entrepreneur is an entity which has the ability to find and act upon opportunities to translate inventions or technologies into products and services: "The entrepreneur is able to recognize the commercial potential of the invention and organize the capital, talent, and other resources that turn an invention into a commercially viable innovation." Entrepreneurship_sentence_8

In this sense, the term "entrepreneurship" also captures innovative activities on the part of established firms, in addition to similar activities on the part of new businesses. Entrepreneurship_sentence_9

Yet, the definition is still narrow in the sense that it still focuses on the creation of economic (commercial) value. Entrepreneurship_sentence_10

Perspectives on entrepreneurship Entrepreneurship_section_0

As an academic field, entrepreneurship accommodates different schools of thought. Entrepreneurship_sentence_11

It has been studied within disciplines such as economics, sociology and economic history. Entrepreneurship_sentence_12

Some view entrepreneurship as allocated to the entrepreneur. Entrepreneurship_sentence_13

These scholars tend to focus on what the entrepreneur does and what traits that an entrepreneur has (see for example the text under the headings Elements below). Entrepreneurship_sentence_14

This is sometimes been referred to as the functionalistic approach to entrepreneurship. Entrepreneurship_sentence_15

Others deviate from the individualistic perspective to turn the spotlight on the entrepreneurial process and immerse in the interplay between agency and context. Entrepreneurship_sentence_16

This approach is sometimes referred to as the processual approach, or the contextual turn/approach to entrepreneurship. Entrepreneurship_sentence_17

Elements Entrepreneurship_section_1

Entrepreneurship is an act of being an entrepreneur, or "the owner or manager of a business enterprise who, by risk and initiative, attempts to make profits". Entrepreneurship_sentence_18

Entrepreneurs act as managers and oversee the launch and growth of an enterprise. Entrepreneurship_sentence_19

Entrepreneurship is the process by which either an individual or a team identifies a business opportunity and acquires and deploys the necessary resources required for its exploitation. Entrepreneurship_sentence_20

Early-19th-century French economist Jean-Baptiste Say provided a broad definition of entrepreneurship, saying that it "shifts economic resources out of an area of lower and into an area of higher productivity and greater yield". Entrepreneurship_sentence_21

Entrepreneurs create something new, something different—they change or transmute values. Entrepreneurship_sentence_22

Regardless of the firm size, big or small, they can partake in entrepreneurship opportunities. Entrepreneurship_sentence_23

The opportunity to become an entrepreneur requires four criteria. Entrepreneurship_sentence_24

First, there must be opportunities or situations to recombine resources to generate profit. Entrepreneurship_sentence_25

Second, entrepreneurship requires differences between people, such as preferential access to certain individuals or the ability to recognize information about opportunities. Entrepreneurship_sentence_26

Third, taking on risk is a necessity. Entrepreneurship_sentence_27

Fourth, the entrepreneurial process requires the organization of people and resources. Entrepreneurship_sentence_28

The entrepreneur is a factor in and the study of entrepreneurship reaches back to the work of Richard Cantillon and Adam Smith in the late 17th and early 18th centuries. Entrepreneurship_sentence_29

However, entrepreneurship was largely ignored theoretically until the late 19th and early 20th centuries and empirically until a profound resurgence in business and economics since the late 1970s. Entrepreneurship_sentence_30

In the 20th century, the understanding of entrepreneurship owes much to the work of economist Joseph Schumpeter in the 1930s and other Austrian economists such as Carl Menger, Ludwig von Mises and Friedrich von Hayek. Entrepreneurship_sentence_31

According to Schumpeter, an entrepreneur is a person who is willing and able to convert a new idea or invention into a successful innovation. Entrepreneurship_sentence_32

Entrepreneurship employs what Schumpeter called "the gale of creative destruction" to replace in whole or in part inferior innovations across markets and industries, simultaneously creating new products including new business models. Entrepreneurship_sentence_33

In this way, creative destruction is largely responsible for the dynamism of industries and long-run economic growth. Entrepreneurship_sentence_34

The supposition that entrepreneurship leads to economic growth is an interpretation of the residual in endogenous growth theory and as such is hotly debated in academic economics. Entrepreneurship_sentence_35

An alternative description posited by Israel Kirzner suggests that the majority of innovations may be much more incremental improvements such as the replacement of paper with plastic in the making of drinking straws. Entrepreneurship_sentence_36

The exploitation of entrepreneurial opportunities may include: Entrepreneurship_sentence_37

Entrepreneurship_unordered_list_0

  • Developing a business planEntrepreneurship_item_0_0
  • Hiring the human resourcesEntrepreneurship_item_0_1
  • Acquiring financial and material resourcesEntrepreneurship_item_0_2
  • Providing leadershipEntrepreneurship_item_0_3
  • Being responsible for both the venture's success or failureEntrepreneurship_item_0_4
  • Risk aversionEntrepreneurship_item_0_5

Economist Joseph Schumpeter (1883–1950) saw the role of the entrepreneur in the economy as "creative destruction" – launching innovations that simultaneously destroy old industries while ushering in new industries and approaches. Entrepreneurship_sentence_38

For Schumpeter, the changes and "dynamic disequilibrium brought on by the innovating entrepreneur [were] the norm of a healthy economy". Entrepreneurship_sentence_39

While entrepreneurship is often associated with new, small, for-profit start-ups, entrepreneurial behavior can be seen in small-, medium- and large-sized firms, new and established firms and in for-profit and not-for-profit organizations, including voluntary-sector groups, charitable organizations and government. Entrepreneurship_sentence_40

Entrepreneurship may operate within an entrepreneurship ecosystem which often includes: Entrepreneurship_sentence_41

Entrepreneurship_unordered_list_1

  • Government programs and services that promote entrepreneurship and support entrepreneurs and start-upsEntrepreneurship_item_1_6
  • Non-governmental organizations such as small-business associations and organizations that offer advice and mentoring to entrepreneurs (e.g. through entrepreneurship centers or websites)Entrepreneurship_item_1_7
  • Small-business advocacy organizations that lobby governments for increased support for entrepreneurship programs and more small business-friendly laws and regulationsEntrepreneurship_item_1_8
  • Entrepreneurship resources and facilities (e.g. business incubators and seed accelerators)Entrepreneurship_item_1_9
  • Entrepreneurship education and training programs offered by schools, colleges and universitiesEntrepreneurship_item_1_10
  • Financing (e.g. bank loans, venture capital financing, angel investing and government and private foundation grants)Entrepreneurship_item_1_11

In the 2000s, usage of the term "entrepreneurship" expanded to include how and why some individuals (or teams) identify opportunities, evaluate them as viable, and then decide to exploit them. Entrepreneurship_sentence_42

The term has also been used to discuss how people might use these opportunities to develop new products or services, launch new firms or industries, and create wealth. Entrepreneurship_sentence_43

The entrepreneurial process is uncertain because opportunities can only be identified after they have been exploited. Entrepreneurship_sentence_44

Entrepreneurs exhibit positive biases towards finding new possibilities and seeing unmet market needs, and a tendency towards risk-taking that makes them more likely to exploit business opportunities. Entrepreneurship_sentence_45

History Entrepreneurship_section_2

Historical usage Entrepreneurship_section_3

"Entrepreneur" (/ˌɒ̃trəprəˈnɜːr, -ˈnjʊər/ (listen), UK also /-prɛ-/) is a loanword from French. Entrepreneurship_sentence_46

The word first appeared in the French dictionary entitled Dictionnaire Universel de Commerce compiled by Jacques des Bruslons and published in 1723. Entrepreneurship_sentence_47

Especially in Britain, the term "adventurer" was often used to denote the same meaning. Entrepreneurship_sentence_48

The study of entrepreneurship reaches back to the work in the late 17th and early 18th centuries of Irish-French economist Richard Cantillon, which was foundational to classical economics. Entrepreneurship_sentence_49

Cantillon defined the term first in his Essai sur la Nature du Commerce en Général, or Essay on the Nature of Trade in General, a book William Stanley Jevons considered the "cradle of political economy". Entrepreneurship_sentence_50

Cantillon defined the term as a person who pays a certain price for a product and resells it at an uncertain price, "making decisions about obtaining and using the resources while consequently admitting the risk of enterprise". Entrepreneurship_sentence_51

Cantillon considered the entrepreneur to be a risk taker who deliberately allocates resources to exploit opportunities to maximize the financial return. Entrepreneurship_sentence_52

Cantillon emphasized the willingness of the entrepreneur to assume the risk and to deal with uncertainty, thus he drew attention to the function of the entrepreneur and distinguished between the function of the entrepreneur and the owner who provided the money. Entrepreneurship_sentence_53

Jean-Baptiste Say also identified entrepreneurs as a driver for economic development, emphasizing their role as one of the collecting factors of production allocating resources from less to fields that are more productive. Entrepreneurship_sentence_54

Both Say and Cantillon belonged to French school of thought and known as the physiocrats. Entrepreneurship_sentence_55

Dating back to the time of the medieval guilds in Germany, a craftsperson required special permission to operate as an entrepreneur, the small proof of competence (Kleiner Befähigungsnachweis), which restricted training of apprentices to craftspeople who held a Meister certificate. Entrepreneurship_sentence_56

This institution was introduced in 1908 after a period of so-called freedom of trade (Gewerbefreiheit, introduced in 1871) in the German Reich. Entrepreneurship_sentence_57

However, proof of competence was not required to start a business. Entrepreneurship_sentence_58

In 1935 and in 1953, greater proof of competence was reintroduced (Großer Befähigungsnachweis Kuhlenbeck), which required craftspeople to obtain a Meister apprentice-training certificate before being permitted to set up a new business. Entrepreneurship_sentence_59

In the Ashanti Empire, successful entrepreneurs who accumulated large wealth and men as well as distinguished themselves through heroic deeds were awarded social and political recognition by being called "Abirempon" which means big men. Entrepreneurship_sentence_60

By the eighteenth and nineteenth centuries AD, the appellation "Abirempon" had formalized and politicized to embrace those who conducted trade from which the whole state benefited. Entrepreneurship_sentence_61

The state rewarded entrepreneurs who attained such accomplishments with Mena(elephant tail) which was the "heraldic badge" Entrepreneurship_sentence_62

20th century Entrepreneurship_section_4

In the 20th century, entrepreneurship was studied by Joseph Schumpeter in the 1930s and by other Austrian economists such as Carl Menger (1840-1921), Ludwig von Mises (1881-1973) and Friedrich von Hayek (1899-1992). Entrepreneurship_sentence_63

While the loan from French of the English-language word "entrepreneur" dates to 1762, the word "entrepreneurism" dates from 1902 and the term "entrepreneurship" also first appeared in 1902. Entrepreneurship_sentence_64

According to Schumpeter, an entrepreneur is willing and able to convert a new idea or invention into a successful innovation. Entrepreneurship_sentence_65

Entrepreneurship employs what Schumpeter called the "gale of creative destruction" to replace in whole or in part inferior offerings across markets and industries, simultaneously creating new products and new business models, thus creative destruction is largely responsible for long-term economic growth. Entrepreneurship_sentence_66

The idea that entrepreneurship leads to economic growth is an interpretation of the residual in endogenous growth theory and as such continues to be debated in academic economics. Entrepreneurship_sentence_67

An alternative description by Israel Kirzner (1930- ) suggests that the majority of innovations may be incremental improvements - such as the replacement of paper with plastic in the construction of a drinking straw - that require no special qualities. Entrepreneurship_sentence_68

For Schumpeter, entrepreneurship resulted in new industries and in new combinations of currently existing inputs. Entrepreneurship_sentence_69

Schumpeter's initial example of this was the combination of a steam engine and then current wagon-making technologies to produce the horseless carriage. Entrepreneurship_sentence_70

In this case, the innovation (i.e. the car) was transformational but did not require the development of dramatic new technology. Entrepreneurship_sentence_71

It did not immediately replace the horse-drawn carriage, but in time incremental improvements reduced the cost and improved the technology, leading to the modern auto industry. Entrepreneurship_sentence_72

Despite Schumpeter's early 20th-century contributions, traditional microeconomic theory did not formally consider the entrepreneur in its theoretical frameworks (instead of assuming that resources would find each other through a price system). Entrepreneurship_sentence_73

In this treatment, the entrepreneur was an implied but unspecified actor, consistent with the concept of the entrepreneur being the agent of x-efficiency. Entrepreneurship_sentence_74

For Schumpeter, the entrepreneur did not bear risk: the capitalist did. Entrepreneurship_sentence_75

Schumpeter believed that the equilibrium was imperfect. Entrepreneurship_sentence_76

Schumpeter (1934) demonstrated that the changing environment continuously provides new information about the optimum allocation of resources to enhance profitability. Entrepreneurship_sentence_77

Some individuals acquire the new information before others and recombine the resources to gain an entrepreneurial profit. Entrepreneurship_sentence_78

Schumpeter was of the opinion that entrepreneurs shift the production-possibility curve to a higher level using innovations. Entrepreneurship_sentence_79

Initially, economists made the first attempt to study the entrepreneurship concept in depth. Entrepreneurship_sentence_80

Alfred Marshall viewed the entrepreneur as a multi-tasking capitalist and observed that in the equilibrium of a completely competitive market there was no spot for "entrepreneurs" as economic-activity creators. Entrepreneurship_sentence_81

Changes in politics and society in Russia and China the late-20th century saw a flowering of entrepreneurial activity, producing Russian oligarchs and Chinese millionaires. Entrepreneurship_sentence_82

21st century Entrepreneurship_section_5

In the 2000s, entrepreneurship was extended from its origins in for-profit businesses to include social entrepreneurship, in which business goals are sought alongside social, environmental or humanitarian goals and even the concept of the political entrepreneur. Entrepreneurship_sentence_83

Entrepreneurship within an existing firm or large organization has been referred to as intrapreneurship and may include corporate ventures where large entities "spin-off" subsidiary organizations. Entrepreneurship_sentence_84

Entrepreneurs are leaders willing to take risk and exercise initiative, taking advantage of market opportunities by planning, organizing and deploying resources, often by innovating to create new or improving existing products or services. Entrepreneurship_sentence_85

In the 2000s, the term "entrepreneurship" has been extended to include a specific mindset resulting in entrepreneurial initiatives, e.g. in the form of social entrepreneurship, political entrepreneurship or knowledge entrepreneurship. Entrepreneurship_sentence_86

According to Paul Reynolds, founder of the Global Entrepreneurship Monitor, "by the time they reach their retirement years, half of all working men in the United States probably have a period of self-employment of one or more years; one in four may have engaged in self-employment for six or more years. Entrepreneurship_sentence_87

Participating in a new business creation is a common activity among U.S. workers over the course of their careers". Entrepreneurship_sentence_88

In recent years, entrepreneurship has been claimed as a major driver of economic growth in both the United States and Western Europe. Entrepreneurship_sentence_89

Entrepreneurial activities differ substantially depending on the type of organization and creativity involved. Entrepreneurship_sentence_90

Entrepreneurship ranges in scale from solo, part-time projects to large-scale undertakings that involve a team and which may create many jobs. Entrepreneurship_sentence_91

Many "high value" entrepreneurial ventures seek venture capital or angel funding (seed money) to raise capital for building and expanding the business. Entrepreneurship_sentence_92

Many organizations exist to support would-be entrepreneurs, including specialized government agencies, business incubators (which may be for-profit, non-profit, or operated by a college or university), science parks and non-governmental organizations, which include a range of organizations including not-for-profits, charities, foundations and business advocacy groups (e.g. Chambers of commerce). Entrepreneurship_sentence_93

Beginning in 2008, an annual "Global Entrepreneurship Week" event aimed at "exposing people to the benefits of entrepreneurship" and getting them to "participate in entrepreneurial-related activities" was launched. Entrepreneurship_sentence_94

Relationship between small business and entrepreneurship Entrepreneurship_section_6

The term "entrepreneur" is often conflated with the term "small business" or used interchangeably with this term. Entrepreneurship_sentence_95

While most entrepreneurial ventures start out as a small business, not all small businesses are entrepreneurial in the strict sense of the term. Entrepreneurship_sentence_96

Many small businesses are sole proprietor operations consisting solely of the owner—or they have a small number of employees—and many of these small businesses offer an existing product, process or service and they do not aim at growth. Entrepreneurship_sentence_97

In contrast, entrepreneurial ventures offer an innovative product, process or service and the entrepreneur typically aims to scale up the company by adding employees, seeking international sales and so on, a process which is financed by venture capital and angel investments. Entrepreneurship_sentence_98

In this way, the term "entrepreneur" may be more closely associated with the term "startup". Entrepreneurship_sentence_99

Successful entrepreneurs have the ability to lead a business in a positive direction by proper planning, to adapt to changing environments and understand their own strengths and weakness. Entrepreneurship_sentence_100

Historians' ranking Entrepreneurship_section_7

A 2002 survey of 58 business history professors gave the top spots in American business history to Henry Ford, followed by Bill Gates; John D. Rockefeller; Andrew Carnegie, and Thomas Edison. Entrepreneurship_sentence_101

They were followed by Sam Walton; J. Entrepreneurship_sentence_102 P. Morgan; Alfred P. Sloan; Walt Disney; Ray Kroc; Thomas J. Watson; Alexander Graham Bell; Eli Whitney; James J. Hill; Jack Welch; Cyrus McCormick; David Packard; Bill Hewlett; Cornelius Vanderbilt; and George Westinghouse. Entrepreneurship_sentence_103

A 1977 survey of management scholars reported the top five pioneers in management ideas were: Frederick Winslow Taylor; Chester Barnard; Frank Bunker Gilbreth Sr.; Elton Mayo; and Lillian Moller Gilbreth. Entrepreneurship_sentence_104

Types of entrepreneurship Entrepreneurship_section_8

Ethnic Entrepreneurship_section_9

The term "ethnic entrepreneurship" refers to self-employed business owners who belong to racial or ethnic minority groups in the United States and Europe. Entrepreneurship_sentence_105

A long tradition of academic research explores the experiences and strategies of ethnic entrepreneurs as they strive to integrate economically into mainstream U.S. or European society. Entrepreneurship_sentence_106

Classic cases include Jewish merchants and tradespeople in large U.S. cities in the 19th and early 20th centuries as well as Chinese and Japanese small business owners (restaurants, farmers, shop owners) on the West Coast. Entrepreneurship_sentence_107

In the 2010s, ethnic entrepreneurship has been studied in the case of Cuban business owners in Miami, Indian motel owners of the U.S. and Chinese business owners in Chinatowns across the United States. Entrepreneurship_sentence_108

While entrepreneurship offers these groups many opportunities for economic advancement, self-employment and business ownership in the United States remain unevenly distributed along racial/ethnic lines. Entrepreneurship_sentence_109

Despite numerous success stories of Asian entrepreneurs, a recent statistical analysis of U.S. census data shows that whites are more likely than Asians, African-Americans and Latinos to be self-employed in high prestige, lucrative industries. Entrepreneurship_sentence_110

Institutional Entrepreneurship_section_10

The American-born British economist Edith Penrose has highlighted the collective nature of entrepreneurship. Entrepreneurship_sentence_111

She mentions that in modern organizations, human resources need to be combined to better capture and create business opportunities. Entrepreneurship_sentence_112

The sociologist Paul DiMaggio (1988:14) has expanded this view to say that "new institutions arise when organized actors with sufficient resources [institutional entrepreneurs] see in them an opportunity to realize interests that they value highly". Entrepreneurship_sentence_113

The notion has been widely applied. Entrepreneurship_sentence_114

Cultural Entrepreneurship_section_11

According to Christopher Rea and Nicolai Volland, cultural entrepreneurship is "practices of individual and collective agency characterized by mobility between cultural professions and modes of cultural production", which refers to creative industry activities and sectors. Entrepreneurship_sentence_115

In their book (2015), Rea and Volland identify three types of cultural entrepreneur: "cultural personalities", defined as "individuals who buil[d] their own personal brand of creativity as a cultural authority and leverage it to create and sustain various cultural enterprises"; "tycoons", defined as "entrepreneurs who buil[d] substantial clout in the cultural sphere by forging synergies between their industrial, cultural, political, and philanthropic interests"; and "collective enterprises", organizations which may engage in cultural production for profit or not-for-profit purposes. Entrepreneurship_sentence_116

In the 2000s, story-telling has emerged as a field of study in cultural entrepreneurship. Entrepreneurship_sentence_117

Some have argued that entrepreneurs should be considered “skilled cultural operators” that use stories to build legitimacy, and seize market opportunities and new capital. Entrepreneurship_sentence_118

Others have concluded that we need to speak of a ‘narrative turn’ in cultural entrepreneurship research. Entrepreneurship_sentence_119

Feminist Entrepreneurship_section_12

A feminist entrepreneur is an individual who applies feminist values and approaches through entrepreneurship, with the goal of improving the quality of life and well-being of girls and women. Entrepreneurship_sentence_120

Many are doing so by creating "for women, by women" enterprises. Entrepreneurship_sentence_121

Feminist entrepreneurs are motivated to enter commercial markets by desire to create wealth and social change, based on the ethics of cooperation, equality and mutual respect. Entrepreneurship_sentence_122

Social Entrepreneurship_section_13

Main article: Social entrepreneurship Entrepreneurship_sentence_123

Social entrepreneurship is the use of the by start up companies and other entrepreneurs to develop, fund and implement solutions to social, cultural, or environmental issues. Entrepreneurship_sentence_124

This concept may be applied to a variety of organizations with different sizes, aims, and beliefs. Entrepreneurship_sentence_125

For-profit entrepreneurs typically measure performance using business metrics like profit, revenues and increases in stock prices, but social entrepreneurs are either non-profits or blend for-profit goals with generating a positive "return to society" and therefore must use different metrics. Entrepreneurship_sentence_126

Social entrepreneurship typically attempts to further broad social, cultural, and environmental goals often associated with the voluntary sector in areas such as poverty alleviation, health care and community development. Entrepreneurship_sentence_127

At times, profit-making social enterprises may be established to support the social or cultural goals of the organization but not as an end in itself. Entrepreneurship_sentence_128

For example, an organization that aims to provide housing and employment to the homeless may operate a restaurant, both to raise money and to provide employment for the homeless people. Entrepreneurship_sentence_129

Nascent Entrepreneurship_section_14

A nascent entrepreneur is someone in the process of establishing a business venture. Entrepreneurship_sentence_130

In this observation, the nascent entrepreneur can be seen as pursuing an opportunity, i.e. a possibility to introduce new services or products, serve new markets, or develop more efficient production methods in a profitable manner. Entrepreneurship_sentence_131

But before such a venture is actually established, the opportunity is just a venture idea. Entrepreneurship_sentence_132

In other words, the pursued opportunity is perceptual in nature, propped by the nascent entrepreneur's personal beliefs about the feasibility of the venturing outcomes the nascent entrepreneur seeks to achieve. Entrepreneurship_sentence_133

Its prescience and value cannot be confirmed ex ante but only gradually, in the context of the actions that the nascent entrepreneur undertakes towards establishing the venture, Ultimately, these actions can lead to a path that the nascent entrepreneur deems no longer attractive or feasible, or result in the emergence of a (viable) business. Entrepreneurship_sentence_134

In this sense, over time, the nascent venture can move towards being discontinued or towards emerging successfully as an operating entity. Entrepreneurship_sentence_135

The distinction between the novice, serial and portfolio entrepreneurs is an example of behavior-based categorization. Entrepreneurship_sentence_136

Other examples are the (related) studies by, on start-up event sequences. Entrepreneurship_sentence_137

Nascent entrepreneurship that emphasizes the series of activities involved in new venture emergence, rather than the solitary act of exploiting an opportunity. Entrepreneurship_sentence_138

Such research will help separate entrepreneurial action into its basic sub-activities and elucidate the inter-relationships between activities, between an activity (or sequence of activities) and an individual's motivation to form an opportunity belief, and between an activity (or sequence of activities) and the knowledge needed to form an opportunity belief. Entrepreneurship_sentence_139

With this research, scholars will be able to begin constructing a theory of the micro-foundations of entrepreneurial action. Entrepreneurship_sentence_140

Scholars interested in nascent entrepreneurship tend to focus less on the single act of opportunity exploitation and more on the series of actions in new venture emergence, Indeed, nascent entrepreneurs undertake numerous entrepreneurial activities, including actions that make their businesses more concrete to themselves and others. Entrepreneurship_sentence_141

For instance, nascent entrepreneurs often look for and purchase facilities and equipment; seek and obtain financial backing, form legal entities, organize teams; and dedicate all their time and energy to their business Entrepreneurship_sentence_142

Project-based Entrepreneurship_section_15

Project entrepreneurs are individuals who are engaged in the repeated assembly or creation of temporary organizations. Entrepreneurship_sentence_143

These are organizations that have limited lifespans which are devoted to producing a singular objective or goal and get disbanded rapidly when the project ends. Entrepreneurship_sentence_144

Industries where project-based enterprises are widespread include: sound recording, film production, software development, television production, new media and construction. Entrepreneurship_sentence_145

What makes project-entrepreneurs distinctive from a theoretical standpoint is that they have to "rewire" these temporary ventures and modify them to suit the needs of new project opportunities that emerge. Entrepreneurship_sentence_146

A project entrepreneur who used a certain approach and team for one project may have to modify the business model or team for a subsequent project. Entrepreneurship_sentence_147

Project entrepreneurs are exposed repeatedly to problems and tasks typical of the entrepreneurial process. Entrepreneurship_sentence_148

Indeed, project-entrepreneurs face two critical challenges that invariably characterize the creation of a new venture: locating the right opportunity to launch the project venture and assembling the most appropriate team to exploit that opportunity. Entrepreneurship_sentence_149

Resolving the first challenge requires project-entrepreneurs to access an extensive range of information needed to seize new investment opportunities. Entrepreneurship_sentence_150

Resolving the second challenge requires assembling a collaborative team that has to fit well with the particular challenges of the project and has to function almost immediately to reduce the risk that performance might be adversely affected. Entrepreneurship_sentence_151

Another type of project entrepreneurship involves entrepreneurs working with business students to get analytical work done on their ideas. Entrepreneurship_sentence_152

Millennial Entrepreneurship_section_16

The term "millennial entrepreneur" refers to a business owner who is affiliated with the generation that was brought up using digital technology and mass media—the products of Baby Boomers, those people born during the 1980s and early 1990s. Entrepreneurship_sentence_153

Also known as Generation Y, these business owners are well equipped with knowledge of new technology and new business models and have a strong grasp of its business applications. Entrepreneurship_sentence_154

There have been many breakthrough businesses that have come from millennial entrepreneurs such as Mark Zuckerberg, who created Facebook. Entrepreneurship_sentence_155

Despite the expectation of millennial success, there have been recent studies that have proven this to not be the case. Entrepreneurship_sentence_156

The comparison between millennials who are self-employed and those who are not self-employed shows that the latter is higher. Entrepreneurship_sentence_157

The reason for this is because they have grown up in a different generation and attitude than their elders. Entrepreneurship_sentence_158

Some of the barriers to entry for entrepreneurs are the economy, debt from schooling and the challenges of regulatory compliance. Entrepreneurship_sentence_159

Entrepreneurial behaviors Entrepreneurship_section_17

The entrepreneur is commonly seen as an innovator—a designer of new ideas and business processes. Entrepreneurship_sentence_160

Management skills and strong team building abilities are often perceived as essential leadership attributes for successful entrepreneurs. Entrepreneurship_sentence_161

Political economist Robert Reich considers leadership, management ability and team-building to be essential qualities of an entrepreneur. Entrepreneurship_sentence_162

Uncertainty perception and risk-taking Entrepreneurship_section_18

Theorists Frank Knight and Peter Drucker defined entrepreneurship in terms of risk-taking. Entrepreneurship_sentence_163

The entrepreneur is willing to put his or her career and financial security on the line and take risks in the name of an idea, spending time as well as capital on an uncertain venture. Entrepreneurship_sentence_164

However, entrepreneurs often do not believe that they have taken an enormous amount of risks because they do not perceive the level of uncertainty to be as high as other people do. Entrepreneurship_sentence_165

Knight classified three types of uncertainty: Entrepreneurship_sentence_166

Entrepreneurship_unordered_list_2

  • Risk, which is measurable statistically (such as the probability of drawing a red color ball from a jar containing five red balls and five white balls)Entrepreneurship_item_2_12
  • Ambiguity, which is hard to measure statistically (such as the probability of drawing a red ball from a jar containing five red balls but an unknown number of white balls)Entrepreneurship_item_2_13
  • True uncertainty or Knightian uncertainty, which is impossible to estimate or predict statistically (such as the probability of drawing a red ball from a jar whose contents, in terms of numbers of coloured balls, are entirely unknown)Entrepreneurship_item_2_14

Entrepreneurship is often associated with true uncertainty, particularly when it involves the creation of a novel good or service, for a market that did not previously exist, rather than when a venture creates an incremental improvement to an existing product or service. Entrepreneurship_sentence_167

A 2014 study at ETH Zürich found that compared with typical managers, entrepreneurs showed higher decision-making efficiency and a stronger activation in regions of frontopolar cortex (FPC) previously associated with explorative choice. Entrepreneurship_sentence_168

"Coachability" and advice taking Entrepreneurship_section_19

The ability of entrepreneurs to work closely with and take advice from early investors and other partners (i.e. their coachability) has long been considered a critical factor in entrepreneurial success. Entrepreneurship_sentence_169

At the same time, economists have argued that entrepreneurs should not simply act on all advice given to them, even when that advice comes from well-informed sources, because entrepreneurs possess far deeper and richer local knowledge about their own firm than any outsider. Entrepreneurship_sentence_170

Indeed, measures of coachability are not actually predictive of entrepreneurial success (e.g. measured as success in subsequent funding rounds, acquisitions, pivots and firm survival). Entrepreneurship_sentence_171

This research also shows that older and larger founding teams, presumably those with more subject expertise, are less coachable than younger and smaller founding teams. Entrepreneurship_sentence_172

Strategies Entrepreneurship_section_20

Strategies that entrepreneurs may use include: Entrepreneurship_sentence_173

Entrepreneurship_unordered_list_3

  • Innovation of new products, services or processesEntrepreneurship_item_3_15
  • Continuous process improvement (CPI)Entrepreneurship_item_3_16
  • Exploration of new business modelsEntrepreneurship_item_3_17
  • Use of technologyEntrepreneurship_item_3_18
  • Use of business intelligenceEntrepreneurship_item_3_19
  • Use of economical strategicsEntrepreneurship_item_3_20
  • Development of future products and servicesEntrepreneurship_item_3_21
  • Optimized talent managementEntrepreneurship_item_3_22
  • Entrepreneurial marketing strategies for interactive and innovative networkingEntrepreneurship_item_3_23

Designing individual/opportunity nexus Entrepreneurship_section_21

According to Shane and Venkataraman, entrepreneurship comprises both "enterprising individuals" and "entrepreneurial opportunities", so researchers should study the nature of the individuals who identify opportunities when others do not, the opportunities themselves and the nexus between individuals and opportunities. Entrepreneurship_sentence_174

On the other hand, Reynolds et al. Entrepreneurship_sentence_175

argue that individuals are motivated to engage in entrepreneurial endeavors driven mainly by necessity or opportunity, that is individuals pursue entrepreneurship primarily owing to survival needs, or because they identify business opportunities that satisfy their need for achievement. Entrepreneurship_sentence_176

For example, higher economic inequality tends to increase necessity-based entrepreneurship rates at the individual level. Entrepreneurship_sentence_177

Opportunity perception and biases Entrepreneurship_section_22

One study has found that certain genes affecting personality may influence the income of self-employed people. Entrepreneurship_sentence_178

Some people may be able to use "an innate ability" or quasi-statistical sense to gauge public opinion and market demand for new products or services. Entrepreneurship_sentence_179

Entrepreneurs tend to have the ability to see unmet market needs and underserved markets. Entrepreneurship_sentence_180

While some entrepreneurs assume they can sense and figure out what others are thinking, the mass media plays a crucial role in shaping views and demand. Entrepreneurship_sentence_181

Ramoglou argues that entrepreneurs are not that distinctive and that it is essentially poor conceptualizations of "non-entrepreneurs" that maintain laudatory portraits of "entrepreneurs" as exceptional innovators or leaders Entrepreneurs are often overconfident, exhibit illusion of control, when they are opening/expanding business or new products/services. Entrepreneurship_sentence_182

Styles Entrepreneurship_section_23

Differences in entrepreneurial organizations often partially reflect their founders' heterogenous identities. Entrepreneurship_sentence_183

Fauchart and Gruber have classified entrepreneurs into three main types: Darwinians, communitarians and missionaries. Entrepreneurship_sentence_184

These types of entrepreneurs diverge in fundamental ways in their self-views, social motivations and patterns of new firm creation. Entrepreneurship_sentence_185

Communication Entrepreneurship_section_24

Entrepreneurs need to practice effective communication both within their firm and with external partners and investors to launch and grow a venture and enable it to survive. Entrepreneurship_sentence_186

An entrepreneur needs a communication system that links the staff of her firm and connects the firm to outside firms and clients. Entrepreneurship_sentence_187

Entrepreneurs should be charismatic leaders, so they can communicate a vision effectively to their team and help to create a strong team. Entrepreneurship_sentence_188

Communicating a vision to followers may be the most important act of the transformational leader. Entrepreneurship_sentence_189

Compelling visions provide employees with a sense of purpose and encourage commitment. Entrepreneurship_sentence_190

According to Baum et al. Entrepreneurship_sentence_191

and Kouzes and Posner, the vision must be communicated through written statements and through in-person communication. Entrepreneurship_sentence_192

Entrepreneurial leaders must speak and listen to articulate their vision to others. Entrepreneurship_sentence_193

Communication is pivotal in the role of entrepreneurship because it enables leaders to convince potential investors, partners and employees about the feasibility of a venture. Entrepreneurship_sentence_194

Entrepreneurs need to communicate effectively to shareholders. Entrepreneurship_sentence_195

Nonverbal elements in speech such as the tone of voice, the look in the sender's eyes, body language, hand gestures and state of emotions are also important communication tools. Entrepreneurship_sentence_196

The Communication Accommodation Theory posits that throughout communication people will attempt to accommodate or adjust their method of speaking to others. Entrepreneurship_sentence_197

Face Negotiation Theory describes how people from different cultures manage conflict negotiation to maintain "face". Entrepreneurship_sentence_198

Hugh Rank's "intensify and downplay" communications model can be used by entrepreneurs who are developing a new product or service. Entrepreneurship_sentence_199

Rank argues that entrepreneurs need to be able to intensify the advantages of their new product or service and downplay the disadvantages to persuade others to support their venture. Entrepreneurship_sentence_200

Links to sea piracy Entrepreneurship_section_25

Research from 2014 found links between entrepreneurship and historical sea piracy. Entrepreneurship_sentence_201

In this context, the claim is made for a non-moral approach to looking at the history of piracy as a source of inspiration for entrepreneurship education as well as for research in entrepreneurship and business model generation. Entrepreneurship_sentence_202

Psychological makeup Entrepreneurship_section_26

Ross Levine, an economist at the University of California, Berkeley, and Yona Rubinstein, a professor at the London School of Economics released a study which suggests entrepreneurs are disproportionately white, male, from wealthy and highly educated backgrounds, and prone to "aggressive, illicit, risk-taking activities" as teenagers and young adults. Entrepreneurship_sentence_203

Entrepreneurs also performed above average on aptitude tests. Entrepreneurship_sentence_204

Stanford University economist Edward Lazear found in a 2005 study that variety in education and in work experience was the most important trait that distinguished entrepreneurs from non-entrepreneurs A 2013 study by Uschi Backes-Gellner of the University of Zurich and Petra Moog of the University of Siegen in Germany found that a diverse social network was also an important characteristic of students that would go on to become entrepreneurs. Entrepreneurship_sentence_205

Studies show that the psychological propensities for male and female entrepreneurs are more similar than different. Entrepreneurship_sentence_206

Empirical studies suggest that female entrepreneurs possess strong negotiating skills and consensus-forming abilities. Entrepreneurship_sentence_207

Åsa Hansson, who looked at empirical evidence from Sweden, found that the probability of becoming self-employed decreases with age for women, but increases with age for men. Entrepreneurship_sentence_208

She also found that marriage increased the probability of a person's becoming an entrepreneur. Entrepreneurship_sentence_209

Jesper Sørensen wrote in 2010 that significant influences on the decision to become an entrepreneur include workplace peers and social composition. Entrepreneurship_sentence_210

Sørensen discovered a correlation between working with former entrepreneurs and how often these individuals become entrepreneurs themselves, compared to those who did not work with entrepreneurs. Entrepreneurship_sentence_211

Social composition can influence entrepreneurialism in peers by demonstrating the possibility for success, stimulating a "He can do it, why can't I?" Entrepreneurship_sentence_212

attitude. Entrepreneurship_sentence_213

As Sørensen stated: "When you meet others who have gone out on their own, it doesn't seem that crazy." Entrepreneurship_sentence_214

Entrepreneurs may also be driven to entrepreneurship by past experiences. Entrepreneurship_sentence_215

If someone has faced multiple work stoppages or has been unemployed in the past, the probability of becoming an entrepreneur increases Per Cattell's personality framework, both personality traits and attitudes are thoroughly investigated by psychologists. Entrepreneurship_sentence_216

However, in case of entrepreneurship research these notions are employed by academics too, but vaguely. Entrepreneurship_sentence_217

Cattell states that personality is a system that is related to the environment and further adds that the system seeks explanation to the complex transactions conducted by both—traits and attitudes. Entrepreneurship_sentence_218

This is because both of them bring about change and growth in a person. Entrepreneurship_sentence_219

Personality is that which informs what an individual will do when faced with a given situation. Entrepreneurship_sentence_220

A person's response is triggered by his/her personality and the situation that is faced. Entrepreneurship_sentence_221

Innovative entrepreneurs may be more likely to experience what psychologist Mihaly Csikszentmihalyi calls "flow". Entrepreneurship_sentence_222

"Flow" occurs when an individual forgets about the outside world due to being thoroughly engaged in a process or activity. Entrepreneurship_sentence_223

Csikszentmihalyi suggested that breakthrough innovations tend to occur at the hands of individuals in that state. Entrepreneurship_sentence_224

Other research has concluded that a strong internal motivation is a vital ingredient for breakthrough innovation. Entrepreneurship_sentence_225

Flow can be compared to Maria Montessori's concept of normalization, a state that includes a child's capacity for joyful and lengthy periods of intense concentration. Entrepreneurship_sentence_226

Csikszentmihalyi acknowledged that Montessori's prepared environment offers children opportunities to achieve flow. Entrepreneurship_sentence_227

Thus quality and type of early education may influence entrepreneurial capability. Entrepreneurship_sentence_228

Research on high-risk settings such as oil platforms, investment banking, medical surgery, aircraft piloting and nuclear-power plants has related distrust to failure avoidance. Entrepreneurship_sentence_229

When non-routine strategies are needed, distrusting persons perform better, while when routine strategies are needed trusting persons perform better. Entrepreneurship_sentence_230

Gudmundsson and Lechner extended this research to entrepreneurial firms. Entrepreneurship_sentence_231

They argued that in entrepreneurial firms the threat of failure is ever-present, resembling non-routine situations in high-risk settings. Entrepreneurship_sentence_232

They found that the firms of distrusting entrepreneurs were more likely to survive than the firms of optimistic or overconfident entrepreneurs. Entrepreneurship_sentence_233

The reasons were that distrusting entrepreneurs would emphasize failure-avoidance through sensible task selection and more analysis. Entrepreneurship_sentence_234

Kets de Vries has pointed out that distrusting entrepreneurs are more alert about their external environment. Entrepreneurship_sentence_235

He concluded that distrusting entrepreneurs are less likely to discount negative events and are more likely to engage control mechanisms. Entrepreneurship_sentence_236

Similarly, Gudmundsson and Lechner found that distrust leads to higher precaution and therefore increases chances of entrepreneurial-firm survival. Entrepreneurship_sentence_237

Researchers Schoon and Duckworth completed a study in 2012 that could potentially help identify who may become an entrepreneur at an early age. Entrepreneurship_sentence_238

They determined that the best measures to identify a young entrepreneur are family and social status, parental role-modeling, entrepreneurial competencies at age 10, academic attainment at age 10, generalized self-efficacy, social skills, entrepreneurial intention and experience of unemployment. Entrepreneurship_sentence_239

Strategic entrepreneurship Entrepreneurship_section_27

Some scholars have constructed an operational definition of a more specific subcategory called "Strategic Entrepreneurship". Entrepreneurship_sentence_240

Closely tied with principles of strategic management, this form of entrepreneurship is "concerned about growth, creating value for customers and subsequently creating wealth for owners". Entrepreneurship_sentence_241

A 2011 article for the Academy of Management provided a three-step, "Input-Process-Output" model of strategic entrepreneurship. Entrepreneurship_sentence_242

The model's three steps entail the collection of different resources, the process of orchestrating them in the necessary manner and the subsequent creation of competitive advantage, value for customers, wealth and other benefits. Entrepreneurship_sentence_243

Through the proper use of strategic management/leadership techniques and the implementation of risk-bearing entrepreneurial thinking, the strategic entrepreneur is, therefore, able to align resources to create value and wealth. Entrepreneurship_sentence_244

Leadership Entrepreneurship_section_28

Leadership in entrepreneurship can be defined as "process of social influence in which one person can enlist the aid and support of others in the accomplishment of a common task" in "one who undertakes innovations, finance and business acumen in an effort to transform innovations into economic goods". Entrepreneurship_sentence_245

This refers to not only the act of entrepreneurship as managing or starting a business, but how one manages to do so by these social processes, or leadership skills. Entrepreneurship_sentence_246

(Entrepreneurship in itself can be defined somewhat circularly as "the process by which individuals, teams, or organizations identify and pursue entrepreneurial opportunities without being immediately constrained by the resources they currently control".) Entrepreneurship_sentence_247

An entrepreneur typically has a mindset that seeks out potential opportunities during uncertain times. Entrepreneurship_sentence_248

An entrepreneur must have leadership skills or qualities to see potential opportunities and act upon them. Entrepreneurship_sentence_249

At the core, an entrepreneur is a decision-maker. Entrepreneurship_sentence_250

Such decisions often affect an organization as a whole, which is representative of entrepreneurial leadership within the organization. Entrepreneurship_sentence_251

With the growing global market and increasing technology use throughout all industries, the core of entrepreneurship and the decision-making has become an ongoing process rather than isolated incidents. Entrepreneurship_sentence_252

This becomes knowledge management, which is "identifying and harnessing intellectual assets" for organizations to "build on past experiences and create new mechanisms for exchanging and creating knowledge". Entrepreneurship_sentence_253

This belief draws upon a leader's past experiences that may prove useful. Entrepreneurship_sentence_254

It is a common mantra for one to learn from their past mistakes, so leaders should take advantage of their failures for their benefit. Entrepreneurship_sentence_255

This is how one may take their experiences as a leader for the use in the core of entrepreneurship decision-making. Entrepreneurship_sentence_256

Global leadership Entrepreneurship_section_29

The majority of scholarly research done on these topics has taken place in North America. Entrepreneurship_sentence_257

Words like "leadership" and "entrepreneurship" do not always translate well into other cultures and languages. Entrepreneurship_sentence_258

For example, in North America a leader is often thought of as charismatic, but German culture frowns on such charisma due to the charisma of Nazi leader Adolf Hitler (1889-1945). Entrepreneurship_sentence_259

Other cultures, as in some European countries, view the term "leader" negatively, like the French. Entrepreneurship_sentence_260

The participative leadership style that is encouraged in the United States is considered disrespectful in many other parts of the world due to the differences in power distance. Entrepreneurship_sentence_261

Many Asian and Middle Eastern countries do not have "open door" policies for subordinates, who would never informally approach their managers/bosses. Entrepreneurship_sentence_262

For countries like that, an authoritarian approach to management and leadership is more customary. Entrepreneurship_sentence_263

Despite cultural differences, the successes and failures of entrepreneurs can be traced to how leaders adapt to local conditions. Entrepreneurship_sentence_264

Within the increasingly global business environment a successful leader must be able to adapt and have insight into other cultures. Entrepreneurship_sentence_265

To respond to the environment, corporate visions are becoming transnational in nature, to enable the organization to operate in or provide services/goods for other cultures. Entrepreneurship_sentence_266

Entrepreneurship training and education Entrepreneurship_section_30

Michelacci and Schivardi are a pair of researchers who believe that identifying and comparing the relationships between an entrepreneur's earnings and education level would determine the rate and level of success. Entrepreneurship_sentence_267

Their study focused on two education levels, college degree and post-graduate degree. Entrepreneurship_sentence_268

While Michelacci and Schivardi do not specifically determine characteristics or traits for successful entrepreneurs, they do believe that there is a direct relationship between education and success, noting that having a college knowledge does contribute to advancement in the workforce. Entrepreneurship_sentence_269

Michelacci and Schivardi state there has been a rise in the number of self-employed people with a baccalaureate degree. Entrepreneurship_sentence_270

However, their findings also show that those who are self-employed and possess a graduate degree has remained consistent throughout time at about 33 percent. Entrepreneurship_sentence_271

They briefly mention those famous entrepreneurs like Steve Jobs and Mark Zuckerberg who were college dropouts, but they call these cases all but exceptional as it is a pattern that many entrepreneurs view formal education as costly, mainly because of the time that needs to be spent on it. Entrepreneurship_sentence_272

Michelacci and Schivardi believe that in order for an individual to reach the full success they need to have education beyond high school. Entrepreneurship_sentence_273

Their research shows that the higher the education level the greater the success. Entrepreneurship_sentence_274

The reason is that college gives people additional skills that can be used within their business and to operate on a higher level than someone who only "runs" it. Entrepreneurship_sentence_275

Resources and financing Entrepreneurship_section_31

Entrepreneurial resources Entrepreneurship_section_32

An entrepreneurial resource is any company-owned asset that has economic value creating capabilities. Entrepreneurship_sentence_276

Economic value creating both tangible and intangible sources are considered as entrepreneurial resources. Entrepreneurship_sentence_277

Their economic value is generating activities or services through mobilization by entrepreneurs. Entrepreneurship_sentence_278

Entrepreneurial resources can be divided into two fundamental categories: tangible and intangible resources. Entrepreneurship_sentence_279

Tangible resources are material sources such as equipment, building, furniture, land, vehicle, machinery, stock, cash, bond and inventory that has a physical form and can be quantified. Entrepreneurship_sentence_280

On the contrary, intangible resources are nonphysical or more challenging to identify and evaluate, and they possess more value creating capacity such as human resources including skills and experience in a particular field, organizational structure of the company, brand name, reputation, entrepreneurial networks that contribute to promotion and financial support, know-how, intellectual property including both copyrights, trademarks and patents. Entrepreneurship_sentence_281

Bootstrapping Entrepreneurship_section_33

At least early on, entrepreneurs often "bootstrap-finance" their start-up rather than seeking external investors from the start. Entrepreneurship_sentence_282

One of the reasons that some entrepreneurs prefer to "bootstrap" is that obtaining equity financing requires the entrepreneur to provide ownership shares to the investors. Entrepreneurship_sentence_283

If the start-up becomes successful later on, these early equity financing deals could provide a windfall for the investors and a huge loss for the entrepreneur. Entrepreneurship_sentence_284

If investors have a significant stake in the company, they may as well be able to exert influence on company strategy, chief executive officer (CEO) choice and other important decisions. Entrepreneurship_sentence_285

This is often problematic since the investor and the founder might have different incentives regarding the long-term goal of the company. Entrepreneurship_sentence_286

An investor will generally aim for a profitable exit and therefore promotes a high-valuation sale of the company or IPO to sell their shares. Entrepreneurship_sentence_287

Whereas the entrepreneur might have philanthropic intentions as their main driving force. Entrepreneurship_sentence_288

Soft values like this might not go well with the short-term pressure on yearly and quarterly profits that publicly traded companies often experience from their owners. Entrepreneurship_sentence_289

One consensus definition of bootstrapping sees it as "a collection of methods used to minimize the amount of outside debt and equity financing needed from banks and investors". Entrepreneurship_sentence_290

The majority of businesses require less than $10,000 to launch, which means that personal savings are most often used to start. Entrepreneurship_sentence_291

In addition, bootstrapping entrepreneurs often incur personal credit-card debt, but they also can utilize a wide variety of methods. Entrepreneurship_sentence_292

While bootstrapping involves increased personal financial risk for entrepreneurs, the absence of any other stakeholder gives the entrepreneur more freedom to develop the company. Entrepreneurship_sentence_293

Bootstrapping methods include: Entrepreneurship_sentence_294

Entrepreneurship_unordered_list_4

Additional financing Entrepreneurship_section_34

Many businesses need more capital than can be provided by the owners themselves. Entrepreneurship_sentence_295

In this case, a range of options is available including a wide variety of private and public equity, debt and grants. Entrepreneurship_sentence_296

Private equity options include: Entrepreneurship_sentence_297

Entrepreneurship_unordered_list_5

Debt options open to entrepreneurs include: Entrepreneurship_sentence_298

Entrepreneurship_unordered_list_6

Grant options open to entrepreneurs include: Entrepreneurship_sentence_299

Entrepreneurship_unordered_list_7

  • Equity-free acceleratorsEntrepreneurship_item_7_40
  • Business plan/business pitch competitions for college entrepreneurs and othersEntrepreneurship_item_7_41
  • Small Business Innovation Research grants from the U.S. governmentEntrepreneurship_item_7_42

Effect of taxes Entrepreneurship_section_35

Entrepreneurs are faced with liquidity constraints and often lack the necessary credit needed to borrow large amounts of money to finance their venture. Entrepreneurship_sentence_300

Because of this, many studies have been done on the effects of taxes on entrepreneurs. Entrepreneurship_sentence_301

The studies fall into two camps: the first camp finds that taxes help and the second argues that taxes hurt entrepreneurship. Entrepreneurship_sentence_302

Cesaire Assah Meh found that corporate taxes create an incentive to become an entrepreneur to avoid double taxation. Entrepreneurship_sentence_303

Donald Bruce and John Deskins found literature suggesting that a higher corporate tax rate may reduce a state's share of entrepreneurs. Entrepreneurship_sentence_304

They also found that states with an inheritance or estate tax tend to have lower entrepreneurship rates when using a tax-based measure. Entrepreneurship_sentence_305

However, another study found that states with a more progressive personal income tax have a higher percentage of sole proprietors in their workforce. Entrepreneurship_sentence_306

Ultimately, many studies find that the effect of taxes on the probability of becoming an entrepreneur is small. Entrepreneurship_sentence_307

Donald Bruce and Mohammed Mohsin found that it would take a 50 percentage point drop in the top tax rate to produce a one percent change in entrepreneurial activity. Entrepreneurship_sentence_308

Predictors of success Entrepreneurship_section_36

Factors that may predict entrepreneurial success include the following: Entrepreneurship_sentence_309

Entrepreneurship_description_list_8

Entrepreneurship_unordered_list_9

  • Establishing strategies for the firm, including growth and survival strategiesEntrepreneurship_item_9_43
  • Maintaining the human resources (recruiting and retaining talented employees and executives)Entrepreneurship_item_9_44
  • Ensuring the availability of required materials (e.g. raw resources used in manufacturing, computer chips, etc.)Entrepreneurship_item_9_45
  • Ensuring that the firm has one or more unique competitive advantagesEntrepreneurship_item_9_46
  • Ensuring good organizational design, sound governance and organizational coordinationEntrepreneurship_item_9_47
  • Congruency with the culture of the societyEntrepreneurship_item_9_48

Entrepreneurship_description_list_10

Entrepreneurship_unordered_list_11

  • Business-to-business (B2B) or business-to-consumer (B2C) models can be usedEntrepreneurship_item_11_49
  • High growth marketEntrepreneurship_item_11_50
  • Target customers or markets that are untapped or missed by othersEntrepreneurship_item_11_51

Entrepreneurship_description_list_12

Entrepreneurship_unordered_list_13

  • Growing industryEntrepreneurship_item_13_52
  • High technology impact on the industryEntrepreneurship_item_13_53
  • High capital intensityEntrepreneurship_item_13_54
  • Small average incumbent firm sizeEntrepreneurship_item_13_55

Entrepreneurship_description_list_14

Entrepreneurship_unordered_list_15

  • Large, gender-diverse and racially diverse team with a range of talents, rather than an individual entrepreneurEntrepreneurship_item_15_56
  • Graduate degreesEntrepreneurship_item_15_57
  • Management experience prior to start-upEntrepreneurship_item_15_58
  • Work experience in the start-up industryEntrepreneurship_item_15_59
  • Employed full-time prior to new venture as opposed to unemployedEntrepreneurship_item_15_60
  • Prior entrepreneurial experienceEntrepreneurship_item_15_61
  • Full-time involvement in the new ventureEntrepreneurship_item_15_62
  • Motivated by a range of goals, not just profitEntrepreneurship_item_15_63
  • Number and diversity of team members' social ties and breadth of their business networksEntrepreneurship_item_15_64

Entrepreneurship_description_list_16

Entrepreneurship_unordered_list_17

  • Written business planEntrepreneurship_item_17_65
  • Focus on a unified, connected product line or service lineEntrepreneurship_item_17_66
  • Competition based on a dimension other than price (e.g. quality or service)Entrepreneurship_item_17_67
  • Early, frequent intense and well-targeted marketingEntrepreneurship_item_17_68
  • Tight financial controlsEntrepreneurship_item_17_69
  • Sufficient start-up and growth capitalEntrepreneurship_item_17_70
  • Corporation model, not sole proprietorshipEntrepreneurship_item_17_71

Entrepreneurship_description_list_18

Entrepreneurship_unordered_list_19

  • Wealth can enable an entrepreneur to cover start-up costs and deal with cash flow challengesEntrepreneurship_item_19_72
  • Dominant race, ethnicity or gender in a socially stratified cultureEntrepreneurship_item_19_73

See also Entrepreneurship_section_37

Entrepreneurship_unordered_list_20


Credits to the contents of this page go to the authors of the corresponding Wikipedia page: en.wikipedia.org/wiki/Entrepreneurship.