The Anatomy of an Entrepreneur

Family Background and Motivation
Authors: Vivek Wadhwa Raj Aggarwal Krisztina “Z” Holly Alex Salkever

July 2009

AUTHORS
Vivek Wadhwa Associate Director, Center for Entrepreneurship and Research Commercialization at Duke University and Senior Research Associate, Harvard Law School Raj Aggarwal Dean and Sullivan Professor College of Business Administration, The University of Akron Krisztina “Z” Holly Executive Director, USC Stevens Institute for Innovation Vice Provost for Innovation, University of Southern California Alex Salkever Visiting Researcher Masters of Engineering Management Program Pratt School of Engineering, Duke University Special Thanks: Robert Litan, E.J. Reedy, Bo Fishback Student Researchers: Moline Prak, Francisco Regalado, Neeti Agarwal, Savithri Arulanandasamy, Tahsin Hashem, Swetha Kolluri, Ayoola Lapite, Jeffery Lee, Lynn Lee, Vinay Lekharaju, Aibek Nurkadyr, Rachel Prabhakaran, Keertana Ravindran, Arjun Reddy, Anisha Sequeira, Karna Vishwas

©2009 by the Ewing Marion Kauffman Foundation. All rights reserved.

The Anatomy of an Entrepreneur Family Background and Motivation July 2009 The Anatomy of an Entrepreneur: Family Background and Motivation 1 .

............................................................................................................... and capitalizing on a business idea .............................................................................................................................................9 Majority come from middle-class or upper-lower-class families.............................................................................11 Figure 10—What is the Highest Level of Degree Earned by Your Mother?...11 Entrepreneurship didn’t always run in the family ...............8 Figure 1—Type of Business Currently Running or Founded ..6 Methodology/Industries Surveyed ............................................................................10 The average birth order of respondents in their family was 2...........................................................................................9 They also do well.....................................................................7..........6 Early entrepreneurs and those with an early interest in entrepreneurship are different ..................................5 Most entrepreneurs are married and have children ........................ Figure 7—Number of Siblings ...................................2 and the average number of siblings was 3........................... owning a company....... For 38................................6 Not important or less-important factors: Inability to obtain employment or encouragement from others ..............................................1..................11 Figure 9—What is the Highest Level of Degree Earned by Your Father? .............................................................2 percent indicated siblings had previously started businesses.................................................................10 Entrepreneurs usually better educated than their parents ................................9 They tend to do very well in high school......................................... their father was the first one to start a business in their family and 15...... startup culture................................ in college .................9 Company founders tend to be well-educated .........Table of Contents Introduction and Findings ..................................................... ......................................................................................................................................................8 Detailed Findings ........................................................8 percent of respondents..................................................................9 percent) of respondents were the first in their family to launch a business.................10 Figure 6—How Would You Describe Your Family’s Circumstances as You Grew Up? ................................................9 Figure 4—How Would You Rank Your High School Academic Performance Relative to Your Peers? ...................8 Figure 2—Country of Birth ................................................................................................................................................................................................8 Definition of founder .. The standard deviation for this distribution was 7...................................................................................................................................................................................................................................................................................5 These entrepreneurs tend to come from middle-class or upper-lower-class backgrounds... were better educated and more entrepreneurial than their parents......5 Motivations for becoming entrepreneurs: Building wealth................ but not as well....................................6 Most had significant industry experience when starting their companies ....................... and did better in high school than in college .......... ................................10 Figure 8—Birth Order ........................................................9 Figure 3—Highest Level of Degree .....................................................5 Early interest and propensity to start companies.............................................................................................................11 2 The Anatomy of an Entrepreneur: Family Background and Motivation ..................................9 Figure 5—How Would You Rank Your College/University Academic Performance Relative to Your Peers? .......................................................................................4 Company founders tend to be middle-aged and well-educated......................................9 The average and median age of company founders in our sample when they started their current companies was 40.....................11 More than half (51......

............ Overall Population ........................................17 Serial entrepreneurs: extremely interested in starting business in college and motivated by wanting to own a company..........................................................................18 Figure 31—Level of Motivation to Build Wealth in Respondents from “Lower-Upper-Class” Background vs.17 Respondents from a “lower-upper-class” background: more likely to be driven by wealth or wanting own company and interested in entrepreneurship during college ...................................................................................................17 Figure 30—Level of Motivation as Wanting to Own Their Company in Serial Entrepreneurs vs..........................................14 Figure 20—Working for Someone Else Did Not Appeal to Me...................................................................................................................16 Figure 27—Level of Interest in Entrepreneurship in College vs..................13 Figure 15—How Interested Were You in Becoming an Entrepreneur While You Were Completing Your Higher Education?......................................................18 Figure 32—Level of Interest in Entrepreneurship During College by Those with “Lower-Upper-Class” Background vs.................12 Figure 12—What Was Your Marital Status When You Started the Business?..................................................................................................... Overall Population......................................15 Figure 24—An Entrepreneurial Friend or Family Member Was a Role Model................................................12 Figure 13—How Many Children Did You Have Living In Your Household When You Started Your Business? ...................................................................................................................................13 Figure 16—Wanted to Build Wealth ......................................................................................................................................15 Figure 21—Inability to Find Traditional Employment.............13 Figure 17—Wanted to Capitalize on a Business Idea I Had .............18 Analysis and Conclusions ........................................................13 Figure 18—Startup Company Culture Appealed to Me.......................................................................15 Most had significant industry experience when starting their companies. Overall Population: ...................................12 Figure 14—How Many Businesses Have You Started? ......................... Overall Population .................................................... Number of Years Worked before Starting First Business .........................................16 Early entrepreneurs and those with an early interest in entrepreneurship are different ........................................................................................................................................................................15 Figure 22—Co-Founder Encouraged Me to Become a Partner and Start Our Company...............Figure 11—Which Members of Your Family Started a Business Before You Did? ..............................................................................................................................17 Figure 28—Number of Years Worked Before Launching First Business by Marital Status ....................................................12 Early interest and propensity to start companies..20 The Anatomy of an Entrepreneur: Family Background and Motivation 3 .......................................................................................................................................................................14 Figure 19—Have Always Wanted My Own Company.............................16 Figure 25—Approximately How Many Years Did You Work for Another Employer Prior to Starting Your First Business? ..................................................................................................................13 Motivations for becoming an entrepreneur ........................14 Less important or not-important factors................................................................16 Figure 26—Time Taken to Start a Company for Those with Extreme Interest in Entrepreneurship in College vs..........................11 Married with children......................................................................................15 Figure 23—Developed a Technology in a Laboratory Environment and Wanted to See It Make an Impact .......12 Always thinking about entrepreneurship?..17 Figure 29—Number of Companies Started by Entrepreneurs Who were Extremely Interested in Entrepreneurship in College vs............ Overall Population.........................

the circumstances that can foster or induce entrepreneurship. The Survey of Business Owners from the Census Bureau is a good source of overview statistics on business owners in the United States. Census Bureau data and the U. Other private surveys. competitiveness. and services. Office of Advocacy contract. including aerospace and defense. Sergey Brin. it is meant to be illustrative of the backgrounds of entrepreneurs in industries that we expected to be higher growth.census. Detailed statistics and charts are available in latter sections of this paper. health care. Small Business Administration. 3. and the differences between immigrants and U. but is only completed every five years and has very limited space for questions (http://www. Celebrity entrepreneurs often grace the covers of prominent publications.S. PhD. such as the Kauffman Firm Survey.kauffman. in that we are able only to reach entrepreneurs whose companies are still alive. and the mindset and beliefs of entrepreneurs could prove helpful both in supporting the existing class of entrepreneurs and in augmenting the ranks of entrepreneurs. This is a follow-up to several research projects by the Global Engineering and Entrepreneurship project at Duke University.S. 1998–2004. and Larry Page often grace the covers of prominent publications. (This was a broader range of industries than we previously researched). Bill Gates. Here are some of our key findings.7 percent of the non-farm private gross domestic product. we are affected by a survivor bias. very little is known today about the backgrounds.S. like most research in this area. in 2004 small firms (<500 employees) employed 50. motivations.S. and beliefs of the founders of businesses in high-growth industries. PhD. motivations. Small Business Administration found that small firms had a higher percentage of patents per employee than larger firms.9 trillion in annual payroll.org/research-and-policy/kauffman-firmsurvey.S. 1. According to the U. we surveyed 549 company founders in a variety of industries. November 2008. LLC. Celebrity entrepreneurs such as Steve Jobs.9 percent of the private-sector work force and generated 50. Understanding how entrepreneurs develop. Entrepreneurs are among the most celebrated people in our culture. in 2004 firms with fewer than 500 employees had $1. An extensive report released in November 2008 by the U. life histories. but are focused on a different population of businesses (http://www. These company founders and innovators fuel economic growth and give the nation its competitive edge. computer and electronics. Small Business Administration. and familial) and motivations of entrepreneurs. We also asked founders more detailed questions about their backgrounds. and experiences in launching companies. also have information on owner backgrounds. April 2007. the education and backgrounds of technology company founders. 2. 4 The Anatomy of an Entrepreneur: Family Background and Motivation .I n t r o d u c t i o n a n d F i n d i n g s Introduction and Findings Entrepreneurs are among the most celebrated people in our culture.3 Unfortunately.gov/econ/sbo/index. While our research cannot be generalized to the entire population of entrepreneurs in the United States. Our previous research had focused on the contributions of skilled immigrants. U.S. submitted by Kathryn Kobe.1 According to that same report. For this project. Economic Consulting Services. and Diana Hicks.2 However.-born company founders. These company founders and innovators fuel economic growth and give the nation its competitive edge.aspx). The Small Business Share of GDP. educational. which has been researching the effect of globalization on the engineering profession and on U. not including benefits. This paper is aimed at helping to begin filling some of those information gaps by providing high-level insights into the backgrounds (socio-economic. An Analysis of Small Business Patents by Industry and Firm Size: SBA Research Paper by Anthony Breitzman. and that younger firms were more likely to have a higher percentage of patents per employee than older firms.html).

9 percent of the overall sample).I n t r o d u c t i o n a n d F i n d i n g s 75 percent ranked their academic performance among the top 30 percent of the high school class. • The fathers of 50.5 percent) ranked their performance among the top 10 percent. These entrepreneurs tend to come from middle-class or upper-lower-class backgrounds.5 percent).8 percent said they came from upper-lower-class families (blue-collar workers in some form of manual labor). • 95. Most entrepreneurs are married and have children • 69. as did 33.6 percent upper-middle class and 36. 18. • 67 percent ranked their academic performance among the top 30 percent of their undergraduate class.5 percent of respondents came from middle-class backgrounds (34. or siblings who had previously started businesses.3 percent had little or no interest.1 percent of respondents themselves had earned bachelor’s degrees. and 43. respectively. (This is consistent with our previous research. mother.9 percent of respondents indicated they were married when they launched their first business.1.1 percent of the company founders held bachelor’s or advanced degrees.2 and the average number of siblings was 3. with a majority (52. which found the average and median age of technology company founders to be 39). but a smaller percentage (37.9 percent of the mothers. • More than half (51. separated. with a majority (52.9 percent.5 percent who indicated that they were “extremely interested” in becoming entrepreneurs during college.4 percent) ranking their performance among the top 10 percent. 6. and 47 percent had more advanced degrees. Only 38.7 percent didn't even think about it. Those from lower-upper-class backgrounds were more likely to have been extremely interested in starting a business than the average (25 percent vs. • 59. and 13. and were better educated and more entrepreneurial than their parents • 71. Additionally.3. The Anatomy of an Entrepreneur: Family Background and Motivation 5 .7 percent of respondents indicated they had at least one child when they launched their first business.2 percent were divorced.9 percent) of respondents were the first in their families to launch a business. but 34. 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 40.4 percent) ranking their performance among the top 10 percent. • Less than 1 percent came from extremely rich or extremely poor backgrounds • The average birth order of respondents in their family was 2. • Of the 24.8 percent. and 15. • The majority of the entrepreneurs in our sample were serial entrepreneurs. The average number of businesses launched by respondents was approximately 2. An additional 5.2 percent. 47.5 percent had two or more children. or widowed. 21. • 75 percent ranked their academic performance among the top 30 percent of the high school class.9 percent lower-middle class).4 percent were starting their first businesses. Company founders tend to be middle-aged and well-educated.1 percent went on to start more than two companies (as compared to 32. 41. had a father. Early interest and propensity to start companies • 52 percent of respondents had some interest in becoming an entrepreneur when they were in college.

Only 4. • 60. • Significant percentages of respondents started their first companies after working eleven to fifteen years (23. with 16 percent of respondents citing this as an extremely important factor and 16.8 percent from the rest of the population).4 percent from the “not very interested” group.8 percent of respondents citing it as not at all a factor.4 percent) had worked as employees at other companies for more than six years before launching their own companies. Responses to this question were relatively evenly distributed in a rough bell curve. Nearly half (47.2 percent said the appeal of a startup culture was an important motivation.1 percent had developed a technology they wanted to commercialize.5 percent said this was an important factor. Most had significant industry experience when starting their companies • The majority of respondents (75.3 percent). with 16 percent of respondents citing this as an extremely important factor and 16. • Those who were “extremely interested” in starting a company while in college were far more likely to be early entrepreneurs.1 percent of respondents who grew up in “lower-upper-class” families. • 37. as compared to 46.8 percent of respondents indicated desire to build wealth as an important motivation in becoming an entrepreneur. 6 The Anatomy of an Entrepreneur: Family Background and Motivation .6 percent).1 percent of respondents indicated that capitalizing on a business idea was an important motivation in becoming an entrepreneur. • 68. sixteen to twenty years (14. or greater than twenty years (10.3 percent) for someone else.3 percent said that working for others did not appeal to them. the total sample average of 59. Responses to this question were relatively evenly distributed in a rough bell curve. A co-founder’s encouragement was important for 27. startup culture.3 percent said that working for others did not appeal to them. the total sample average of 69. This factor was rated as important by 82.6 percent vs.9 percent vs. • 66.3 percent). 69 percent started their companies within ten years of working for someone else (as compared to 46. Of these entrepreneurs.8 percent of respondents said the role played by an entrepreneurial friend or family member was an important factor.2 percent of respondents said they have always wanted to own their own companies.9 percent) launched their first companies with more than ten years of work experience.9 percent of the respondents.8 percent of respondents citing it as not at all a factor. This was a stronger factor for those from lower-upper-class backgrounds—78.3 percent of respondents stated that inability to find traditional employment was not at all a factor in starting their own businesses. • 64. 60. • 18.6 percent ranked this as important. owning a company. Not important or less-important factors: inability to obtain employment or encouragement from others • 80. • 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.I n t r o d u c t i o n a n d F i n d i n g s Motivations for becoming entrepreneurs: building wealth. and capitalizing on a business idea • 74.9 percent) or to have kids when they launched their first businesses (26. 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.

Methodology/Industries Surveyed and Detailed Findings The Anatomy of an Entrepreneur: Family Background and Motivation 7 .

thus may not be representative of the overall population of businesses. medical.3% 1. which was conducted between August 2008 and March 2009. Figure 1: Type of Business Currently Running or Founded Computer Hardware/ Software Engineering Consultants Medical Defense Energy Biotechnology Telecommunication Other 30.4% 18. Our team of researchers sent up to four unsolicited e-mails to these founders.5% 3 8% 3. These responses were not always consistent with the OneSource classification of these companies. Other sectors included biotech.7% 0 20 40 60 80 100 Percentage Definition of founder We allowed company executives to tell us if they were a founder. approximately 40 percent completed the survey.7% 1. as well as their views on and motivations toward starting a business. military.6% 6. We estimate that.4% 23. We asked the founders to categorize their companies by industry. Five hundred and forty-nine respondents took the survey.0% 4. In some cases.” 8 The Anatomy of an Entrepreneur: Family Background and Motivation . This report focuses on surviving businesses.0% 4.8% 10.0% 0 5 10 15 20 25 30 35 Percentage Figure 2: Country of Birth USA India UK Canada Germany Iran Italy China Norway Taiwan Other 8 82. we extracted records of companies based in the following industries: Automotive & Aerospace • Aerospace & Defense Computers & Electronics • Audio & Video Equipment • Computer Hardware • Computer Networks • Computer Peripherals • Computer Services • Computer Storage Devices • Electronic Instruments & Controls • Scientific & Technical Instruments • Semiconductors • Software & Programming Health Care • Biotechnology & Drugs • Health Care Facilities • Medical Equipment & Supplies Services • Computer Services • Engineering Consultants • Software & Programming We extracted randomized records by region. The guidelines we provided for defining a “founder” was “an early employee.2% 5.2% 4.8% 1 1. and other (non-technology). To construct our dataset. who typically joined the company in its first year.6% 0. of the founders we could reach.6% 0. We contacted company founders via e-mail and requested they complete a brief online survey consisting of a series of questions about their own personal and family backgrounds.M e t h o d o l g y / I n d u s t r i e s S u r ve ye d Methodology/Industries Surveyed The primary data source for this work is a subset of an existing dataset of corporate records included in the OneSource Information Services Companies database. The respondents were highly concentrated in technology sectors.0% 0. We visited the Web sites of these companies to make sure the company was still in operation and to obtain names of founders and contact information. we followed up with phone calls. with 77 percent indicating that their current company made computer hardware/software or other forms of technology products and services. before the company developed its products and perfected its business model.6% 0.8% 0.

5% 0.4% 22.7% 3. Top 10% Top 30% Average Bottom 30% Bottom 10% N/A 37.0% They tend to do very well in high school A significant majority of respondents (75 percent) ranked their academic performance among the top 30 percent of the high school class. however.6% 19. JD PhD Postdoctoral Research MD MBA Master’s Bachelor’s Associate’s Other 2.6% 2.4 percent) ranking their performance among the top 10 percent.6% 0 5 10 15 20 Percentage 25 30 35 40 The Anatomy of an Entrepreneur: Family Background and Motivation 9 .5% 29. The percentage of founders that rated themselves in the bottom 30 percent of class performance was nearly the same in high school (4.6% 13.6% 1. with a majority (52.8% 0.3% 0. The standard deviation for this distribution was 7.9 percent) and college (4.6 percent ranked their performance average or below average.1 percent hold bachelor’s degrees or higher.D e t a i l e d F i n d i n g s Detailed Findings Age The average and median age of company founders in our sample when they started their current company was forty.4% 0 10 20 30 Percentage 40 50 60 Figure 5: How Would You Rank Your College/ University Academic Performance Relative to Your Peers? They also do well. Figure 4: How Would You Rank Your High School Academic Performance Relative to Your Peers? Top 10% Top 30% Average Bottom 30% Bottom 10% N/A 52.0% 2. Figure 3: Highest Level of Degree Company founders tend to be well-educated Company founders in the industries we researched tend to be well-educated.5% 26. in college A solid majority of respondents (67 percent) ranked their academic performance among the top 30 percent of their undergraduate class.5 percent) ranked their performance among the top 10 percent. More than 95.2% 0 10 20 30 40 50 Percentage 48. but not as well.4 percent). but a smaller percentage (37.8% 19. A higher percentage of respondents had just bachelor’s degrees (48 percent) than advanced degrees (47 percent).7% 1. But about 24.0% 1.4% 10.7.8% 3.

D e t a i l e d F i n d i n g s Majority come from middle-class or upperlower-class families We used the following definitions for socioeconomic status by Dennis Gilbert. Figure 7: Number of Siblings 0 1 2 3 4 5 6 7 More than 7 3.6% 0. JDs.” individuals who have become rich within their own lifetimes. with postgraduate degrees like MBAs.” people who have been born into and raised with wealth.4% 0.0% 5 10 15 20 25 Percentage Figure 8: Birth Order First Second Third Fourth Fifth Sixth Seventh Eighth Ninth or More 42.3% 4.7% 21. These results seem to show that entrepreneurs. mostly consists of old “noble” or prestigious families. 10 The Anatomy of an Entrepreneur: Family Background and Motivation .2.9 percent described themselves as lower-middle class.8 percent described themselves as upperlower class. With regard to extremely wealthy families. and Hickey.6 percent describing their socio-economic level as uppermiddle class. LOWER-MIDDLE CLASS: Lower-paid white collar workers. as well as the “working poor.2% 23.8% 2.: Wadsworth. Further. and 21. Belmont. (2002). W. but not manual laborers.5% 28. Gilbert. MDs.6% 0 5 10 15 20 Percentage 25 30 35 40 Respondents’ average birth order in their families was 2.9% 34.5% 0.8% 36. Thompson..0% 19. LOWER-UPPER CLASS: “New money. The average number of siblings was 3. D.7 percent) indicated their origins were lower-lower class and only three respondents (0. Only three respondents (0. Also known as the “working class. J. the results indicate that extreme poverty is a significant barrier to entrepreneurship.4% 0. comfortable family existences but not from circumstances of great family wealth.7% 7. on the whole.8% 4. 36. Often hold associate’s or bachelor’s degrees. with 34.1.8% 21.8% 0 10 20 30 40 50 Percentage 4. UPPER-MIDDLE CLASS: Professionals with a college education and. UPPER-LOWER CLASS: Blue-collar workers and manual laborers.5% 1.9% 6. MSs. Figure 6: How Would You Describe Your Family’s Circumstances as You Grew Up? Lower-Lower Class Upper-Lower Class Lower-Middle Class Upper-Middle Class Lower-Upper Class Upper-Upper Class 0. are more likely to emerge from stable. the pool is so small in the United States that the low response rate might more be a reflection of a smaller population than anything else.” What we found was that respondents tended not to come from either extreme of the socioeconomic spectrum.” LOWER-LOWER CLASS: The homeless and permanently unemployed. PhDs. The American Class Structure: In An Age of Growing Inequality. Calif.4 UPPER-UPPER CLASS: “Old money. etc.6 percent) indicated their origins were upper-upper class.6% 0 3. more often.6% 14. Among respondents.1% 14.6% 5.

MD Master’s Bachelor’s Associate’s High School Diploma/GED Other No Degree 6.5% 0 5 10 15 Percentage 20 25 30 Figure 10: What is the Highest Level of Degree Earned by Your Mother? PhD MBA.9 percent) of respondents were the first in their families to launch a business. their father was the first to start a business in their family.D e t a i l e d F i n d i n g s Figure 9: What is the Highest Level of Degree Earned by Your Father? Entrepreneurs usually better educated than their parents In terms of parents’ educational level.0% 27. JD.4% 8.9% Mother Siblings 15. For 38.2 percent indicated siblings had previously started businesses.4% 10.4 percent earned bachelor’s degrees.5 percent earned advanced degrees. MD Master’s Bachelor’s Associate’s High School Diploma/GED Other No Degree 0. Among mothers of entrepreneurs.8 percent of respondents. and only 24. 15.0% 0.4% 24.2% 24. PhD MBA. I was the first in my immediate family to start a business Father 51.9% 0.9% 38.2% 0 10 20 30 Percentage 40 50 60 The Anatomy of an Entrepreneur: Family Background and Motivation 11 . only 9.4% 18.1 percent earned bachelor’s degrees. JD. only 23 percent of entrepreneurs’ fathers earned advanced degrees and only 27.1% 0.9% 19.1% 5.9% 11.1% 5.8% 6.5% 0 5 10 15 20 2 Percentage 25 30 35 40 Figure 11: Which Members of Your Family Started a Business Before You Did? Entrepreneurship didn’t always run in the family More than half (51.6 percent earned high school degrees or no degree at all.1% 37. 55.

The potential for underestimating the average number of businesses launched per respondent is likely minimal.4% 26.5 percent had two or more children.9% 4. the average number of businesses launched by respondents was approximately 2.4% 0.9% 69.5 But 41. This stereotype appears to be false. due to the small number of respondents claiming to have launched ten or more businesses.7% 1.2% 0. In this calculation. Single 24. 1 2 3 4 5 6 7 8 9 More than 10 41.4 percent were running the first business they had started.5% 0.7% 0 10 20 30 40 Percentage Married Divorced/ Separated Widowed 50 60 70 80 Figure 13: How Many Children Did You Have Living In Your Household When You Started Your Business? 0 1 2 3 4 5 40.0% 0 10 20 30 40 50 Percentage 5.0% 11. and 43. unmarried workaholic with no time for a wife or husband and children.D e t a i l e d F i n d i n g s Figure 12: What Was Your Marital Status When You Started the Business? Married with Children One common stereotype of an entrepreneur is a childless. as 59.6% 7.0% 3.9 percent of respondents indicated they were married when they launched their first businesses.0% 16. 12 The Anatomy of an Entrepreneur: Family Background and Motivation .4% 28.3% 16. we assigned the weighted value ten to respondents who had indicated they had launched ten or more businesses. Additionally.3. 69.6% 1.9% 0 10 20 30 40 50 Percentage Figure 14: How Many Business Have You Started? Early interest and propensity to start companies The majority of the entrepreneurs in our sample were serial entrepreneurs.8% 2.4% 1.7 percent of respondents indicated they had at least one child when they launched their first businesses.2% 1.

3 percent indicated that they were not at all interested or not very interested. very important. very important.5 percent had some interest.0% 3. very important. and 13. or extremely important motivation in becoming an entrepreneur.1% 34.2 percent of respondents viewed this as an important. In terms of capitalizing on business ideas they had.2% 14.2% 6.8 percent of respondents indicated they viewed this as an important. Figure 16: Wanted to Build Wealth Extremely important factor Very important factor Important factor Not very important factor Not at all a factor N/A 18. 68. or extremely important factor was that working for others did not appeal to them. capitalizing on business ideas they had. Not at all interested Not very interested Didn’t think about it Somewhat interested Extremely interested 7.3% 1. or extremely important motivation in becoming an entrepreneur. very important. and the appeal of startup culture.1 percent of respondents indicated they viewed this as an important. 64.8% 14. or extremely important motivation in becoming an entrepreneur. An additional 27.0% 16. owning their own companies. In terms of the appeal of a startup culture.2 percent of respondents viewed this as an important. 74.7% 24. Regarding desire to build wealth.5 percent indicated they were extremely interested in becoming entrepreneurs when they were completing their higher education.1% 0 5 10 15 20 25 30 35 Percentage Figure 17: Wanted to Capitalize on a Business Idea I Had Extremely important Very important factor Important factor Not very important factor Not at all a factor N/A 23. very important.7% 7.6% 19.4% 24.4% 32. 66.5% 0 5 10 15 20 25 30 35 Percentage Motivations for becoming an entrepreneur The strongest motivations for respondents in starting their own businesses were building wealth. With regard to always wanting to own their own businesses. But 34.7% 27.D e t a i l e d F i n d i n g s Figure 15: How Interested Were You in Becoming an Entrepreneur While You Were Completing Your Higher Education? Always thinking about entrepreneurship? Only 24. And 60.8% 0 5 10 15 20 25 Percentage The Anatomy of an Entrepreneur: Family Background and Motivation 13 .7 percent didn’t give this any thought.5% 24.3 percent said that an important. or extremely important motivation in becoming an entrepreneur.

0% 3.0% 20.9% 0 5 10 15 Percentage 20 25 30 Figure 20: Working for Someone Else Did Not Appeal To Me Extremely important factor Very important factor Important factor Not very important factor Not at all a factor N/A 16.4% 16.6% 0 5 10 15 20 25 Percentage 14 The Anatomy of an Entrepreneur: Family Background and Motivation .4% 0 5 10 15 20 25 Percentage Figure 19: Have Always Wanted My Own Company Extremely important factor Very important factor Important factor Not very important factor Not at all a factor N/A 27.8% 16.8% 17.9% 22.5% 18.3% 12.1% 23.9% 20.3% 23.8% 0.D e t a i l e d F i n d i n g s Figure 18: Startup Company Culture Appealed to Me Extremely important factor Very important factor Important factor Not very important factor Not at all a factor N/A 20.1% 1.5% 15.8% 22.

1% 8.0% 0 10 20 30 Percentage Extremely important factor With regard to the impact of role models such as family members or entrepreneur friends.1% 0 10 20 30 40 50 Percentage Important factor Not very important factor Not at all a factor N/A Figure 23: Developed a Technology in a Laboratory Environment and Wanted to See it Make an Impact Extremely important factor Very important factor Important factor Not very important factor Not at all a factor N/A 8.2% 13.3 said that this was not at all a factor.2% 12.3% 80. or extremely important role in the decision to start a company.0% 15.5% 35.3% 16. very important. entrepreneurial friends.3% 3. or family members to launch a company played an important.9 percent of respondents felt that encouragement by a co-founder.9% 21.5 percent of respondents stated that inability to find traditional employment was an important motivator in starting their own businesses.0% 50.7% 0 5 1 10 15 20 Percentage 40 50 60 Very important factor Important factor Not very important factor Not at all a factor N/A 25 30 35 40 The Anatomy of an Entrepreneur: Family Background and Motivation 15 .0% 4.2% 5. or extremely important role in their motivations to launch a business.9% 2.3% 11.8% 0 20 40 60 80 100 Percentage 6.2% 18.8% 7. 37. or extremely important motivator toward their business launch. Figure 24: An Entrepreneurial Friend or Family Member Was a Role Model 9. very important. 80.8 percent of respondents indicated they played an important.D e t a i l e d F i n d i n g s Less important or not-important factors Only 4. Figure 21: Inability to Find Traditional Employment Extremely important factor Very important factor Important factor Not very important factor Not at all a factor N/A Figure 22: Co-Founder Encouraged Me to Become a Partner and Start Our Company Extremely important factor Very important factor 1. Only 27. very important.3% 0. And only 18 percent of respondents said that taking a technology they already had developed in the lab and trying to see if it could make an impact was an important.9% 13.9% 10. In fact.0% 44.

sixteen to twenty years (14.8 percent from the rest of the population). Figure 25: Approximately How Many Years Did You Work for Another Employer Prior to Starting Your First Business? 0–5 years 6–10 years 11–15 years 16–20 years 20+ years 24. significant portions (47.3% 10. after passing ten-plus years in the workforce before launching a company. For instance.6 percent).3 percent).0% 14 14.8% 27. we saw a correlation between the level of interest in entrepreneurship during college and the number of years worked before starting a business. Sixty-nine percent started their own companies within ten years of working for someone else (as compared to 46. Generally.4 percent) had worked as employees at other companies for more than six years before launching their own companies. while entrepreneurs do tend to launch companies early in their careers on average. However.6% 23.3 percent) for someone else.8% 27. Overall Population 20+ years 16–20 years 11–15 years 8–10 years 0–5 years 6 6.3% 0 5 10 15 Percentage 20 25 30 Early entrepreneurs and those with an early interest in entrepreneurship are different We analyzed the number of years an entrepreneur had worked for someone else before launching his or her own business. 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. the total sample average of 69.6 percent vs.6% 27.0% 1 11.3 percent).3% 0 10 20 30 40 50 Percentage “Extremely Interested” in Starting a Company While in College Overall Population: Excluding the “Extremely Interested” Group 16 The Anatomy of an Entrepreneur: Family Background and Motivation .9 percent) wait until much later in their careers.4% 19.0% 27.9 percent) or to have children when they launched their first businesses (26.3% 14.5% 41. significant percentages of respondents started their first companies after working eleven to fifteen years (23.5% 12.D e t a i l e d F i n d i n g s Most had significant industry experience when starting their companies The majority of respondents (75.0% 1 . Figure 26: Time Taken to Start a Company for Those with Extreme Interest in Entrepreneurship in College vs. the total sample average of 59.2 percent) launched their companies after working as employees for other companies for between one and ten years.7% 12.9 percent vs. The highest percentage of entrepreneurs (52. In other words. The respondents who said that they were “extremely interested” in starting a company while in college were far more likely to be early entrepreneurs. or greater than twenty years (10.4 percent from the “not very interested” group. only 18 percent from the “extremely interested” group worked for at least fifteen years before starting their own businesses. as compared to 46. Key differences emerged.

9% 25.7% 90 85. Overall Population 5 or more 4 3 2 1 Figure 30: Level of Motivation as Wanting to Own Their Company in Serial Entrepreneurs vs.3% 8 85.6% Not at all a factor N/A 0 10 20 30 40 50 0 5 10 15 20 Percentage 25 30 35 40 Percentage “Extremely Interested” in Entrepreneurship During Higher Education Overall Population: Excluding “Extremely Interested” Group Serial Entrepreneurs Overall Population–Excluding Serial Entrepreneurs The Anatomy of an Entrepreneur: Family Background and Motivation 17 . an average of 59.0% 6 6.4% 22.8% 20. Serial entrepreneurs also indicated that they always wanted their own companies (73 percent vs. Overall Population Extremely important factor Very important factor 12.2% 21.4% 4 44.4% 3 31.2% 12.3% 21.5% 21.5% 24.4% 18.6% Single Married 0 10 20 30 40 50 0 20 4 40 60 80 100 Percentage Percentage Serial entrepreneurs: extremely interested in starting business in college and motivated by wanting to own a company Respondents who were “extremely interested” in entrepreneurship during college were more likely to start more than two companies (47. Number of Years Worked Before Starting First Business Extremely interested Somewhat interested Didn’t think about it Not very interested Not at all interested 20+ years 16–20 years 0–5 years 6–10 years 11– 15 years 16–20 years 20+ years 11–15 years 8–10 years 0–5 years Figure 28: Number of Years Worked Before Launching First Business by Marital Status 10 10.6 percent from the rest of the population).7% 6 36.1 percent vs.9% 25.4% 7.9% 57. Figure 29: Number of Companies Started by Entrepreneurs Who Were Extremely Interested in Entrepreneurship in College vs.3% 8 8.8% 27.D e t a i l e d F i n d i n g s Figure 27: Level of Interest in Entrepreneurship in College vs.9% 0.7% 19.9% 1.2% 35.5% 90. an average of 28 percent from the rest of the population).3% 13.6% 13.2% 11.9% 5 5.9% 1.5% 18.5% 8 68.2% Important factor Not very important factor 1 14.

Figure 31: Level of Motivation to Build Wealth in Respondents from “Lower-Upper-Class” Background vs.5% 27. 3 3.6% 27.7% 10.1% 17 8.D e t a i l e d F i n d i n g s Respondents from a “lower-upper-class” background: more likely to be driven by wealth or wanting own company and interested in entrepreneurship during college Fifty percent of respondents who came from a “lower-upper-class” background said that wealth was an extremely important or very important motivator for starting their own businesses.1% 25.1% 10.7% 5.9% 27.0% 18. 41. People from this background were more likely to be driven by always wanting their own companies (78.0% 24.6 percent vs. Overall Population Extremely interested Somewhat interested Didn’t think about it Not very 0.6 percent of the overall population.2% 8 0 5 10 15 20 25 30 35 Percentage Lower-Upper Class Overall Population–Excluding Respondents from “Lower-Upper-Class” Backgrounds Figure 32: Level of Interest in Entrepreneurship During College by Those with “Lower-Upper-Class” Backgrounds vs.6% 35.3% 35 5.5 percent).5 percent. the overall sample average of 63. as compared to 42.5% 32.1% 17.4 percent of them indicated that they were “extremely interested” in entrepreneurship during college as compared to the overall sample average of 24.4% 0 10 20 30 40 50 Percentage Lower-Upper Class Overall Population–Excluding Respondents from “Lower-Upper-Class” Backgrounds 18 The Anatomy of an Entrepreneur: Family Background and Motivation .0% interested Not at all interested 2 23.1% 32.6% 41.7% 7.4% 7. Also. Overall Population Extremely important factor Very important factor Important factor Not very important factor Not at all a factor 25.

Analysis and Conclusions The Anatomy of an Entrepreneur: Family Background and Motivation 19 .

They have ideas they want to commercialize. These entrepreneurs are usually welleducated. In other words. The findings perhaps provide some clues about what conditions might be helpful in supporting entrepreneurs and helping them become successful. Their primary motivations for launching a business are to build wealth. Entrepreneurs don't always come from families of entrepreneurs. with only 5 percent reporting having less than a bachelor’s degree. They are significantly more likely to be married and have children when they launch their first businesses. They performed well in high school and in college. 20 The Anatomy of an Entrepreneur: Family Background and Motivation .Analysis and Conclusions The core findings of this research are straightforward and contradict some prevailing stereotypes. slightly more than half of our sample were the first in their families to launch businesses. But these observations could perhaps be useful guideposts for the next round of inquiry that attempts to understand not only the background and broad motivations of entrepreneurs but also the deeper formative factors that influence this select and incredibly important class of individuals. Entrepreneurs typically are well-educated and experienced. In the industries we researched. They also are likely to be better educated than their parents were. are motivated to build wealth. we are planning further detailed analysis of the dataset. These observations are based on initial analysis of the data. entrepreneurs tend to be the middle child in a three-child household. with the vast majority ranking average or above in their respective institutions. to own their own company. and very few come from backgrounds of extreme wealth or extreme poverty. with half their fathers and a third of their mothers having at least bachelors’ degrees. entrepreneurs are more likely to come from a middle-class or upperlower-class background. and like the idea of being their own bosses in a startup. they largely come from the existing workforce and not from college. and to capitalize on a business idea they had. Entrepreneurs are far more likely to have worked for an employer for more than six years than to have quickly launched their own businesses. On average.

The Anatomy of an Entrepreneur: Family Background and Motivation 21 .

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