The secret sauce to becoming a successful entrepreneur is often said to come from a family with money. According to Quartz, having more financial capital on hand allows individuals to take the risks necessary to start a business. But what really differentiates entrepreneurs from others? Is it their ingenuity, imagination, ability to predict trends or believe in their own ideas? Recent research suggests that it may be the silver spoon bite they were born with. The most common trait among entrepreneurs is access to financial capital, according to an article in Quartz. This is evident in the number of high-profile startups that began their lives in prestigious universities.
Google and many other companies were founded at Stanford, while Airbnb Founders Gather at Rhode Island School of Design. The rising cost of college, especially at elite universities, means that attendance at these schools is beyond the means of most non-wealthy students. The power of networks cannot be overstated, and who you have in your network matters. If your family has money and influence, there's a better chance that you'll meet or be able to introduce yourself to influential and moneyed people who can give you a good start. They can become investors or introduce you to investors, but it's not just about money.
The right connections can give you great advice and introduce you to successful people in your field who can give you insider advice and even potential customers. If you don't have that kind of connection, you're two steps behind even before you start. You don't need Startup Castle to know that if you drink Bud instead of craft beer, prefer Nascar to tennis and like pickup trucks more than hybrids, you're going to be a bad cultural option in the startup world. If you think that won't affect your chances of success, ask the non-white businessmen who have been there. Money isn't the only thing stopping the rich from becoming entrepreneurs, but money can be part of the solution. In the form of scholarships, start-up funds and incubators aimed at those who do not come from wealthy families.
Beyond that, a change of attitude is needed. Not only to encourage unwealthy people to start their own businesses, but also to encourage the world of lenders, advisors and investors to welcome entrepreneurs who don't look or think like themselves. However, I can't say that I've seen much eagerness on the part of someone within the funding power structure to do so. Until we learn to create a startup culture that welcomes everyone, that's the best we're going to achieve. Absolutely not, businessmen who were born rich are a minority.
There are entrepreneurs from all walks of life; some were born poor, others middle class and others rich. Some started small and then grew up, others failed several times before succeeding, and others were lucky. Of course, there are entrepreneurs who are struggling and there are many who failed at least once. Nine out of ten startups will fail and according to Bloomberg 8 out of 10 entrepreneurs who start businesses fail in the first 18 months. This goes against the topic of the Fortune article which suggests that entrepreneurs need family money (“Entrepreneurs come from families with money).
Every entrepreneur on the planet had some kind of mentor or network of people they could turn to for advice, learn and share ideas. But when the entrepreneur has the skills to lead the company's takeoff they can maintain control and continue building the company. Many entrepreneurs are convinced that they cannot start a new business unless they raise angel and venture capital, and they need mentors to guide them. That said while Levine and Rubinstein's findings suggest the role that race could play in entrepreneurship they don't develop it enough for us to draw hard conclusions. Fubu is a great company that demonstrates the good things that can happen when entrepreneurs don't fit well into the mold of Silicon Valley. Entrepreneurship is Andrés Corton who was born in Union City New Jersey to exiled Cuban parents and has built a chain of 4 restaurants (Black Bean Deli) in Orlando without family money without VC and without winning launch contests. Resilience is undoubtedly a necessary trait for success; many notable entrepreneurs only succeeded after leading failed companies. One of my fellow professors on a recent panel pointed out that his entrepreneurship students test business development along the way every successful entrepreneur has learned new traits which makes mentoring an absolute must. Both the increased sense of entitlement in recent years and the belief that becoming an entrepreneur is possible for anyone have an important role to play in this practice of “failing and getting acquired”.
Therefore if you have the possibility of losing money without much regret you would probably take the risk if you are an entrepreneur. To win at the top of the chain succeed in business world and any field you have to be born with talent. Money may not be everything but it certainly helps when it comes to starting a business.