3Further more, in the 18th century the entrepreneur role was distinguished from the capital- providing role. A venture capitalist is a professional money manager who invests in a riskyinvestment from pool of equity capital to obtain a high rate of return on the investment.Whereas, an entrepreneur is one who creates and manages his own enterprise as well as onewho assumes all risks related to running the venture.
In the late 19th and early 20th Centuries
In the late 19th and early 20th centuries, entrepreneurs were frequently not distinguished frommanagers and were viewed mostly from an economic perspective. Hess and Ely defined theterm entrepreneur as the one who organizes and operates an enterprise for personal gain. Theentrepreneur contributes his/her own initiative, skill and integrity in planning, organizing andadministering the enterprise. He/she pays prices for the materials consumed in the business,for the use of the land, for personal service he/ she employs, and for the capital he/ sherequires. He/ she also assume the chance of loss and gain consequent to unforeseen anduncontrollable circumstances. Thus, an entrepreneur is both a risk taker and a manger.
In the Middle of 20th Century
According to Joseph Schumpeter, the function of an entrepreneur is to reform or revolutionizethe patter- of production by exploiting an invention, or more generally, an untriedtechnological possibility for producing a new commodity or producing an old one in a newway, opening a new source of supply of materials or a new outlet for products, by organizinga new industry. The concept of innovation and newness are integral part of entrepreneurshipin this definition. Briefly, an entrepreneur is one who innovates, raises money, assemblesinputs, chooses managers and sets the organization going with his ability. But theentrepreneur differs from the mere innovator since he/she innovates something new andconverts into business by investing his/her money and devoting time and& energy.According to this definition, innovation can occur through:i.
Introduction of new quality in a product,ii.
Development of a new product,iii.
Discovery of a fresh demand and a fresh source of supply and,iv.
Changes in the organization and managementThe concept of entrepreneurship is further refined when principles and terms from a business,managerial and personnel perspective are considered. In particular the concept of entrepreneurship has been explored in this century.Relatively Recent Definitions
In almost all of the definitions of entrepreneurship, there is agreement that we aretalking about a kind of behavior that includes:i.
The organizing and reorganizing of social/economic mechanisms to turn resourcesto practical account, andiii.
The acceptance of risk or failure. ... Albert Shapero
Karl Vesper has researched entrepreneurship and explained that its nature is amatter of individual perception: