Anatomy of an Entrepreneur

Authors:

Vivek Wadhwa

Raj Aggarwal

Krisztina “Z” Holly

Alex Salkever

The Anatomy of an Entrepreneur

Family Background

and Motivation

July 2009

AUTHORS

Vivek WadhwaAssociate Director, Center for Entrepreneurship

and Research Commercialization at Duke University and Senior Research Associate,

Harvard Law School

Raj AggarwalDean and Sullivan Professor

College of Business Administration, The University of Akron

Krisztina “Z” HollyExecutive Director, USC Stevens Institute for Innovation

Vice Provost for Innovation, University of Southern California

Alex SalkeverVisiting Researcher

Masters of Engineering Management ProgramPratt 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, RachelPrabhakaran, Keertana Ravindran, Arjun Reddy, Anisha Sequeira, Karna Vishwas

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

T h e A n a t o m y o f a n E n t r e p r e n e u r : F a m i l y B a c k g r o u n d a n d M o t i v a t i o n 1

The Anatomy of an EntrepreneurFamily Background and Motivation

July 2009

T h e A n a t o m y o f a n E n t r e p r e n e u r : F a m i l y B a c k g r o u n d a n d M o t i v a t i o n2

Table of Contents

Introduction and Findings ......................................................................................................................................4

Company founders tend to be middle-aged and well-educated, and did better in high school than in college ..........................................................................................5

These entrepreneurs tend to come from middle-class or upper-lower-class backgrounds, were better educated and more entrepreneurial than their parents..........................................................5

Most entrepreneurs are married and have children .................................................................................5

Early interest and propensity to start companies......................................................................................5

Motivations for becoming entrepreneurs: Building wealth, owning a company, startup culture, and capitalizing on a business idea ................................................................................6

Not important or less-important factors: Inability to obtain employment or encouragement from others ................................................................................................................6

Most had significant industry experience when starting their companies ................................................6

Early entrepreneurs and those with an early interest in entrepreneurship are different ............................6

Methodology/Industries Surveyed........................................................................................................................8

Figure 1—Type of Business Currently Running or Founded.....................................................................8

Figure 2—Country of Birth ......................................................................................................................8

Definition of founder ..............................................................................................................................8

Detailed Findings ....................................................................................................................................................9

The average and median age of company founders in our sample when they started their current companies was 40. The standard deviation for this distribution was 7.7. ................................................9

Company founders tend to be well-educated .............................................................................................9

Figure 3—Highest Level of Degree ...................................................................................................9

They tend to do very well in high school......................................................................................................9

Figure 4—How Would You Rank Your High School Academic Performance Relative to Your Peers? ..................................................................................................9

They also do well, but not as well, in college ...............................................................................................9

Figure 5—How Would You Rank Your College/University Academic Performance Relative to Your Peers? .................................................................................9

Majority come from middle-class or upper-lower-class families.............................................................10

Figure 6—How Would You Describe Your Family’s Circumstances as You Grew Up? ......................10

The average birth order of respondents in their family was 2.2 and the average number of siblings was 3.1.

Figure 7—Number of Siblings .........................................................................................................10

Figure 8—Birth Order .....................................................................................................................10

Entrepreneurs usually better educated than their parents .......................................................................11

Figure 9—What is the Highest Level of Degree Earned by Your Father? ..........................................11

Figure 10—What is the Highest Level of Degree Earned by Your Mother?.......................................11

Entrepreneurship didn’t always run in the family ......................................................................................11

More than half (51.9 percent) of respondents were the first in their family to launch a business. For 38.8 percent of respondents, their father was the first one to start a business in their family and 15.2 percent indicated siblings had previously started businesses. ............11


Figure 11—Which Members of Your Family Started a Business Before You Did? .............................11

Married with children....................................................................................................................................12

Figure 12—What Was Your Marital Status When You Started the Business?.....................................12

Figure 13—How Many Children Did You Have Living In Your Household When You Started Your Business? ....................................................................................................12

Early interest and propensity to start companies.......................................................................................12

Figure 14—How Many Businesses Have You Started? .....................................................................12

Always thinking about entrepreneurship?...................................................................................................13

Figure 15—How Interested Were You in Becoming an Entrepreneur While You Were Completing Your Higher Education?......................................................................13

Motivations for becoming an entrepreneur ...............................................................................................13

Figure 16—Wanted to Build Wealth ...............................................................................................13

Figure 17—Wanted to Capitalize on a Business Idea I Had ............................................................13

Figure 18—Startup Company Culture Appealed to Me....................................................................14

Figure 19—Have Always Wanted My Own Company.....................................................................14

Figure 20—Working for Someone Else Did Not Appeal to Me........................................................14

Less important or not-important factors.....................................................................................................15

Figure 21—Inability to Find Traditional Employment.......................................................................15

Figure 22—Co-Founder Encouraged Me to Become a Partner and Start Our Company...................15

Figure 23—Developed a Technology in a Laboratory Environment and Wanted to See It Make an Impact ............................................................................................15

Figure 24—An Entrepreneurial Friend or Family Member Was a Role Model..................................15

Most had significant industry experience when starting their companies..............................................16

Figure 25—Approximately How Many Years Did You Work for Another Employer Prior to Starting Your First Business? ..............................................................16

Early entrepreneurs and those with an early interest in entrepreneurship are different ......................16

Figure 26—Time Taken to Start a Company for Those with Extreme Interest in Entrepreneurship in College vs. Overall Population ....................................................................16

Figure 27—Level of Interest in Entrepreneurship in College vs. Number of Years Worked before Starting First Business ...................................................................17

Figure 28—Number of Years Worked Before Launching First Business by Marital Status .................17

Serial entrepreneurs: extremely interested in starting business in college and motivated by wanting to own a company...........................................................................................17

Figure 29—Number of Companies Started by Entrepreneurs Who were Extremely Interested in Entrepreneurship in College vs. Overall Population....................................17

Figure 30—Level of Motivation as Wanting to Own Their Company in Serial Entrepreneurs vs. Overall Population.................................................................................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 ....................18

Figure 31—Level of Motivation to Build Wealth in Respondents from “Lower-Upper-Class” Background vs. Overall Population: ..............................................................18Figure 32—Level of Interest in Entrepreneurship During College by Those with “Lower-Upper-Class” Background vs. Overall Population .......................................................18

Analysis and Conclusions .....................................................................................................................................20

I n t r o d u c t i o n a n d F i n d i n g s


Introduction andFindings

Entrepreneurs are among the most celebratedpeople in our culture. Celebrity entrepreneurs such asSteve Jobs, Bill Gates, Sergey Brin, and Larry Page oftengrace the covers of prominent publications. Thesecompany founders and innovators fuel economicgrowth and give the nation its competitive edge.According to the U.S. Small Business Administration, in2004 small firms (<500 employees) employed 50.9percent of the private-sector work force and generated50.7 percent of the non-farm private gross domesticproduct.1 According to that same report, in 2004firms with fewer than 500 employees had $1.9 trillionin annual payroll, not including benefits. An extensivereport released in November 2008 by the U.S. SmallBusiness Administration found that small firms had ahigher percentage of patents per employee than largerfirms, and that younger firms were more likely to havea higher percentage of patents per employee thanolder firms.2

However, very little is known today about thebackgrounds, life histories, motivations, and beliefs ofthe founders of businesses in high-growth industries.Understanding how entrepreneurs develop, thecircumstances that can foster or induceentrepreneurship, and the mindset and beliefs ofentrepreneurs could prove helpful both in supportingthe existing class of entrepreneurs and in augmentingthe ranks of entrepreneurs. This paper is aimed at

helping to begin filling some of those informationgaps by providing high-level insights into thebackgrounds (socio-economic, educational, andfamilial) and motivations of entrepreneurs.

This is a follow-up to several research projects by theGlobal Engineering and Entrepreneurship project atDuke University, which has been researching the effectof globalization on the engineering profession and onU.S. competitiveness. Our previous research hadfocused on the contributions of skilled immigrants, theeducation and backgrounds of technology companyfounders, and the differences between immigrants andU.S.-born company founders.

For this project, we surveyed 549 company foundersin a variety of industries, including aerospace anddefense, computer and electronics, health care, andservices. (This was a broader range of industries thanwe previously researched). We also asked foundersmore detailed questions about their backgrounds,motivations, and experiences in launching companies.

While our research cannot be generalized to theentire population of entrepreneurs in the UnitedStates, it is meant to be illustrative of the backgroundsof entrepreneurs in industries that we expected to behigher growth.3 Unfortunately, like most research inthis area, we are affected by a survivor bias, in that weare able only to reach entrepreneurs whose companiesare still alive.

Here are some of our key findings. Detailed statisticsand charts are available in latter sections of this paper.

1. U.S. Census Bureau data and the U.S. Small Business Administration, Office of Advocacy contract, The Small Business Share of GDP, 1998–2004, submitted byKathryn Kobe, Economic Consulting Services, LLC, April 2007.2. An Analysis of Small Business Patents by Industry and Firm Size: SBA Research Paper by Anthony Breitzman, PhD, and Diana Hicks, PhD, November 2008.3. The Survey of Business Owners from the Census Bureau is a good source of overview statistics on business owners in the United States, but is only completedevery five years and has very limited space for questions (http://www.census.gov/econ/sbo/index.html). Other private surveys, such as the Kauffman Firm Survey, alsohave information on owner backgrounds, but are focused on a different population of businesses (http://www.kauffman.org/research-and-policy/kauffman-firm-survey.aspx).

Entrepreneurs are among the most celebrated people in our culture.Celebrity entrepreneurs often grace the covers of prominent publications.

These company founders and innovators fuel economic growth and give the nation its competitive edge.



Company founders tend to be middle-agedand well-educated, and did better in highschool than in college• The average and median age of company founders

in our sample when they started their currentcompanies was 40. (This is consistent with ourprevious research, which found the average andmedian age of technology company founders to be 39).

• 95.1 percent of respondents themselves had earnedbachelor’s degrees, and 47 percent had moreadvanced degrees.

• 75 percent ranked their academic performanceamong the top 30 percent of the high school class,with a majority (52.4 percent) ranking theirperformance among the top 10 percent.

• 67 percent ranked their academic performanceamong the top 30 percent of their undergraduateclass, but a smaller percentage (37.5 percent)ranked their performance among the top 10percent.

These entrepreneurs tend to come frommiddle-class or upper-lower-classbackgrounds, and were better educated andmore entrepreneurial than their parents• 71.5 percent of respondents came from middle-class

backgrounds (34.6 percent upper-middle class and36.9 percent lower-middle class). Additionally, 21.8percent said they came from upper-lower-classfamilies (blue-collar workers in some form ofmanual labor).

• Less than 1 percent came from extremely rich orextremely poor backgrounds

• The average birth order of respondents in theirfamily was 2.2 and the average number of siblingswas 3.1.

• The fathers of 50.1 percent of the companyfounders held bachelor’s or advanced degrees, asdid 33.9 percent of the mothers.

• More than half (51.9 percent) of respondents werethe first in their families to launch a business. Only38.8 percent, 6.9 percent, and 15.2 percent,respectively, had a father, mother, or siblings whohad previously started businesses.

Most entrepreneurs are married and havechildren • 69.9 percent of respondents indicated they were

married when they launched their first business. Anadditional 5.2 percent were divorced, separated, orwidowed.

• 59.7 percent of respondents indicated they had atleast one child when they launched their firstbusiness, and 43.5 percent had two or morechildren.

Early interest and propensity to startcompanies• 52 percent of respondents had some interest in

becoming an entrepreneur when they were incollege, but 34.7 percent didn't even think about it,and 13.3 percent had little or no interest. Thosefrom lower-upper-class backgrounds were morelikely to have been extremely interested in starting abusiness than the average (25 percent vs. 18.5percent).

• Of the 24.5 percent who indicated that they were“extremely interested” in becoming entrepreneursduring college, 47.1 percent went on to start morethan two companies (as compared to 32.9 percentof the overall sample).

• The majority of the entrepreneurs in our samplewere serial entrepreneurs. The average number ofbusinesses launched by respondents wasapproximately 2.3; 41.4 percent were starting theirfirst businesses.

75 percent ranked their academic performance among the top 30 percent of the high school class, with a majority (52.4 percent) ranking their

performance among the top 10 percent.



Motivations for becoming entrepreneurs:building wealth, owning a company, startupculture, and capitalizing on a business idea• 74.8 percent of respondents indicated desire to

build wealth as an important motivation inbecoming an entrepreneur. This factor was rated asimportant by 82.1 percent of respondents whogrew up in “lower-upper-class” families.

• 68.1 percent of respondents indicated thatcapitalizing on a business idea was an importantmotivation in becoming an entrepreneur.

• 64.2 percent of respondents said they have alwayswanted to own their own companies. This was astronger factor for those from lower-upper-classbackgrounds—78.6 percent ranked this asimportant.

• 66.2 percent said the appeal of a startup culturewas an important motivation.

• 60.3 percent said that working for others did notappeal to them. Responses to this question wererelatively evenly distributed in a rough bell curve,with 16 percent of respondents citing this as anextremely important factor and 16.8 percent ofrespondents citing it as not at all a factor.

Not important or less-important factors:inability to obtain employment orencouragement from others • 80.3 percent of respondents stated that inability to

find traditional employment was not at all a factorin starting their own businesses. Only 4.5 percentsaid this was an important factor.

• 37.8 percent of respondents said the role played byan entrepreneurial friend or family member was animportant factor. A co-founder’s encouragementwas important for 27.9 percent of the respondents.

• 18.1 percent had developed a technology theywanted to commercialize.

Most had significant industry experiencewhen starting their companies• The majority of respondents (75.4 percent) had

worked as employees at other companies for morethan six years before launching their owncompanies. Nearly half (47.9 percent) launched theirfirst companies with more than ten years of workexperience.

• Significant percentages of respondents started theirfirst companies after working eleven to fifteen years(23.3 percent), sixteen to twenty years (14.3percent), or greater than twenty years (10.3 percent)for someone else.

Early entrepreneurs and those with an earlyinterest in entrepreneurship are different• Entrepreneurs who started their companies soon

after graduating (with zero to five years of workexperience) and those who had an extremely stronginterest in entrepreneurship in college were far lesslikely to be married (36.6 percent vs. the totalsample average of 69.9 percent) or to have kidswhen they launched their first businesses (26.9 percent vs. the total sample average of 59.6 percent).

• Those who were “extremely interested” in starting acompany while in college were far more likely to beearly entrepreneurs. Of these entrepreneurs, 69 percent started their companies within ten yearsof working for someone else (as compared to 46.8 percent from the rest of the population).

• Level of interest in entrepreneurship during collegewas correlated to the number of years workedbefore starting a business—only 18 percent fromthe “extremely interested” group worked for atleast fifteen years before starting their ownbusinesses, as compared to 46.4 percent from the“not very interested” group.

60.3 percent said that working for others did not appeal to them.Responses to this question were relatively evenly distributed in a rough bellcurve, with 16 percent of respondents citing this as an extremely important

factor and 16.8 percent of respondents citing it as not at all a factor.


Methodology/Industries Surveyedand Detailed Findings


M e t h o d o l g y / I n d u s t r i e s S u r v e y e d

Methodology/IndustriesSurveyed

The primary data source for this work is a subset ofan existing dataset of corporate records included in theOneSource Information Services Companies database.To construct our dataset, we extracted records ofcompanies 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. Wevisited the Web sites of these companies to make surethe company was still in operation and to obtainnames of founders and contact information. Wecontacted company founders via e-mail and requestedthey complete a brief online survey consisting of aseries of questions about their own personal andfamily backgrounds, as well as their views on andmotivations toward starting a business. Our team ofresearchers sent up to four unsolicited e-mails to thesefounders. In some cases, we followed up with phonecalls.

Five hundred and forty-nine respondents took thesurvey, which was conducted between August 2008and March 2009. We estimate that, of the founderswe could reach, approximately 40 percent completedthe survey.

The respondents were highly concentrated intechnology sectors, with 77 percent indicating thattheir current company made computerhardware/software or other forms of technologyproducts and services. Other sectors included biotech,medical, military, and other (non-technology).

We asked the founders to categorize theircompanies by industry. These responses were notalways consistent with the OneSource classification ofthese companies. This report focuses on survivingbusinesses, thus may not be representative of theoverall population of businesses.

Definition of founderWe allowed company executives to tell us if they

were a founder. The guidelines we provided fordefining a “founder” was “an early employee, whotypically joined the company in its first year, before thecompany developed its products and perfected itsbusiness model.”

Figure 1: Type of Business Currently Running or Founded

Computer Hardware/Software

Engineering Consultants

Medical

Defense

Energy

Biotechnology

Other

Telecommunication

Percentage

0 5 10 15 20 25 30 350 5 10 15 20

30.4%

23.0%

18.0%

4.2%

4.0%

4.2%

5.8%

10.4%

Figure 2: Country of Birth

USAIndia

UKCanada

Percentage

0 20

82.5%3.8%1.7%1.3%1.0%0.8%0.6%0.6%0.6%0.6%

6.7%40 60 80 100

88883 8%3133

0

GermanyIranItaly

China

NorwayTaiwanOther

Figure 5: How Would You Rank Your College/ University Academic Performance Relative to Your Peers?

Top 10%

Top 30%

Average

Percentage

0 5 10 15 20 25 30 35 400

Bottom 30%

Bottom 10%

N/A

37.5%

29.5%

26.0%

2.7%

1.6%

2.6%


They also do well, but not as well, in collegeA solid majority of respondents (67 percent)

ranked their academic performance among the top30 percent of their undergraduate class, but asmaller percentage (37.5 percent) ranked theirperformance among the top 10 percent. Thepercentage of founders that rated themselves in thebottom 30 percent of class performance was nearlythe same in high school (4.9 percent) and college(4.4 percent).

Company founders tend to be well-educated Company founders in the industries we

researched tend to be well-educated. More than95.1 percent hold bachelor’s degrees or higher. A higher percentage of respondents had justbachelor’s degrees (48 percent) than advanceddegrees (47 percent), however.

Figure 4: How Would You Rank Your High School Academic Performance Relative to Your Peers?

Top 10%

Top 30%

Average

Percentage

0 10 20 30 40 50 600

Bottom 30%

Bottom 10%

N/A

52.4%

22.6%

19.7%

3.6%

1.3%

0.4%

Figure 3: Highest Level of Degree

JD

PhDPostdoctoral

ResearchMD

Percentage

0 10 20 30 40 500

MBA

Master’s

Bachelor’s

Associate’s

Other

2.4%

0.8%0.6%

13.8%

19.0% 48.0%

1.8%

3.2%

10.5%

They tend to do very well in high school A significant majority of respondents (75 percent)

ranked their academic performance among the top30 percent of the high school class, with a majority(52.4 percent) ranking their performance among thetop 10 percent. But about 24.6 percent ranked theirperformance average or below average.

Detailed FindingsAge

The average and median age of company founders in our sample when they started their current company wasforty. The standard deviation for this distribution was 7.7.

D e t a i l e d F i n d i n g s

Majority come from middle-class or upper-lower-class families

We used the following definitions for socio-economic status by Dennis Gilbert.4

UPPER-UPPER CLASS: “Old money;” peoplewho have been born into and raised withwealth; mostly consists of old “noble” orprestigious families.

LOWER-UPPER CLASS: “New money;”individuals who have become rich within theirown lifetimes.

UPPER-MIDDLE CLASS: Professionals with acollege education and, more often, withpostgraduate degrees like MBAs, PhDs, MDs,JDs, MSs, etc.

LOWER-MIDDLE CLASS: Lower-paid whitecollar workers, but not manual laborers.Often hold associate’s or bachelor’s degrees.

UPPER-LOWER CLASS: Blue-collar workersand manual laborers. Also known as the“working class.”

LOWER-LOWER CLASS: The homeless andpermanently unemployed, as well as the“working poor.”

What we found was that respondents tendednot to come from either extreme of the socio-economic spectrum, with 34.6 percentdescribing their socio-economic level as upper-middle class. Among respondents, 36.9 percentdescribed themselves as lower-middle class, and21.8 percent described themselves as upper-lower class. Only three respondents (0.7 percent)indicated their origins were lower-lower classand only three respondents (0.6 percent)indicated their origins were upper-upper class.These results seem to show that entrepreneurs,on the whole, are more likely to emerge fromstable, comfortable family existences but notfrom circumstances of great family wealth.

Further, the results indicate that extremepoverty is a significant barrier toentrepreneurship. With regard to extremelywealthy families, the pool is so small in theUnited States that the low response rate mightmore be a reflection of a smaller populationthan anything else.

Figure 6: How Would You Describe Your Family’s Circumstances as You Grew Up?

Lower-Lower Class

Upper-Lower Class

Lower-Middle Class

Percentage

0 5 10 15 20 25 30 35 40

Upper-Middle Class

Lower-Upper Class

Upper-Upper Class

0.7%

0.6%

21.8%

5.4%

34.6%

36.9%

4. Gilbert, D. (2002). The American Class Structure: In An Age of Growing Inequality. Belmont, Calif.: Wadsworth; Thompson, W., and Hickey, J.



Respondents’ average birth order intheir families was 2.2. The averagenumber of siblings was 3.1.

Figure 7: Number of Siblings

0

1

2

3

4

5

7

More than 7

6

Percentage

0 5 10 15 20 250

3.0%

19.2%

23.8%

21.6%

14.7%

7.3%

4.8%2.6%

3.0%

Figure 8: Birth Order

First

Second

Third

Fourth

Fifth

Sixth

Eighth

Ninth or More

Seventh

Percentage

0 10 20 30 40 500

42.5%

0.4%0.6%

0.8%

1.5%

4.5%6.8%

14.9%28.1%



Entrepreneurs usually better educated thantheir parents

In terms of parents’ educational level, only 23percent of entrepreneurs’ fathers earned advanceddegrees and only 27.1 percent earned bachelor’sdegrees. Among mothers of entrepreneurs, only 9.5percent earned advanced degrees, and only 24.4percent earned bachelor’s degrees; 55.6 percentearned high school degrees or no degree at all.

Figure 9: What is the Highest Level of Degree Earned by Your Father?

PhD

MBA, JD, MD

Master’s

Bachelor’s

Associate’s

Other

No Degree

High School Diploma/GED

Percentage

0 5 10 15 20 25 300 5 10 15 20

6.1%

11.0%

27.1%

5.4%

24.0%

0.9%

19.5%

5.9%

Figure 10: What is the Highest Level of Degree Earned by Your Mother?

PhD

MBA, JD, MD

Master’s

Bachelor’s

Associate’s

Other

No Degree

High School Diploma/GED

Percentage0 5 10 15 20 25 30 35 400 5 10 15 2

0.9%

18.5%

0.4%

37.1%

10.1%

24.4%

8.2%

0.4%

Entrepreneurship didn’t always run in thefamily

More than half (51.9 percent) of respondentswere the first in their families to launch abusiness. For 38.8 percent of respondents, theirfather was the first to start a business in theirfamily; 15.2 percent indicated siblings hadpreviously started businesses.

Figure 11: Which Members of Your Family Started a Business Before You Did?

I was the first in my immediate

family to start a business

Father

Mother

Siblings

Percentage0 10 20 30 40 50 60

51.9%

38.8%

6.9%

15.2%



Early interest and propensity to startcompanies

The majority of the entrepreneurs in our samplewere serial entrepreneurs; the average number ofbusinesses launched by respondents wasapproximately 2.3.5 But 41.4 percent were runningthe first business they had started.

Figure 14: How Many Business Have You Started?

12

3

45

6

89

More than 10

7

Percentage0 10 20 30 40 500

41.4%

1.0%0.4%1.2%1.6%2.2%1.8%

7.7%16.6%

26.0%

5. In this calculation, we assigned the weighted value ten to respondents who had indicated they had launched ten or more businesses. The potential forunderestimating the average number of businesses launched per respondent is likely minimal, due to the small number of respondents claiming to have launched tenor more businesses.

Figure 12: What Was Your Marital Status When You Started the Business?

Single

Married

Divorced/Separated

Widowed

Percentage0 10 20 30 40 50 60 70 80

24.9%

0.7%

4.5%

69.9%

Figure 13: How Many Children Did You Have Living In Your Household When You Started Your Business?

0

1

2

3

4

5

Percentage0 10 20 30 40 500

40.3%

3.4%

0.9%

11.0%

28.0%

16.4%

Married with Children One common stereotype of an entrepreneur is a

childless, unmarried workaholic with no time for awife or husband and children. This stereotypeappears to be false, as 59.7 percent of respondentsindicated they had at least one child when theylaunched their first businesses, and 43.5 percent hadtwo or more children. Additionally, 69.9 percent ofrespondents indicated they were married when theylaunched their first businesses.



Always thinking about entrepreneurship?Only 24.5 percent indicated they were extremely

interested in becoming entrepreneurs when theywere completing their higher education. Anadditional 27.5 percent had some interest. But 34.7 percent didn’t give this any thought, and 13.3 percent indicated that they were not at allinterested or not very interested.

Figure 15: How Interested Were You in Becoming an Entrepreneur While You Were Completing Your Higher Education?

Not at all interested

Not very interested

Didn’t think about it

Extremely interested

Somewhat interested

Percentage0 5 10 15 20 25 30 35

7.2%

6.1%

34.7%

27.5%

24.5%

Motivations for becoming an entrepreneurThe strongest motivations for respondents in

starting their own businesses were building wealth,owning their own companies, capitalizing onbusiness ideas they had, and the appeal of startupculture. Regarding desire to build wealth, 74.8percent of respondents indicated they viewed this asan important, very important, or extremelyimportant motivation in becoming an entrepreneur.In terms of capitalizing on business ideas they had, 68.1 percent of respondents indicated they viewedthis as an important, very important, or extremelyimportant motivation in becoming an entrepreneur.With regard to always wanting to own their ownbusinesses, 64.2 percent of respondents viewed thisas an important, very important, or extremelyimportant motivation in becoming an entrepreneur.In terms of the appeal of a startup culture, 66.2percent of respondents viewed this as an important,very important, or extremely important motivation inbecoming an entrepreneur. And 60.3 percent saidthat an important, very important, or extremelyimportant factor was that working for others didnot appeal to them.

Figure 16: Wanted to Build Wealth

Percentage0 5 10 15 20 25 30 350

Extremely important factor

Very important factor

Important factor

Not very important factor

Not at all a factor

N/A

32.0%

24.4%

7.3%

1.1%

18.4%

16.7%

Figure 17: Wanted to Capitalize on a Business Idea I Had

Extremely important


Important factor

Not at all a factor

N/A


Percentage0 5 10 15 20 250

23.6%

24.8%

19.7%

14.2%

14.0%

3.8%



Figure 18: Startup Company Culture Appealed to Me

Percentage0 5 10 15 20 250



Important factor


Not at all a factor

N/A

20.8%

22.1%

23.3%

12.5%

18.0%

3.4%

Figure 19: Have Always Wanted My Own Company

Percentage0 5 10 15 20 25 300



Important factor


Not at all a factor

N/A

27.5%

15.9%

20.8%

17.8%

16.1%

1.9%

Figure 20: Working for Someone Else Did Not Appeal To Me

Percentage0 5 10 15 20 250

16.0%

20.3%

22.4%

16.8%

0.6%

23.9%



Important factor


Not at all a factor

N/A



Less important or not-important factorsOnly 4.5 percent of respondents stated that inability to find traditional employment was an important motivator

in starting their own businesses. In fact, 80.3 said that this was not at all a factor. Only 27.9 percent ofrespondents felt that encouragement by a co-founder, entrepreneurial friends, or family members to launch acompany played an important, very important, or extremely important role in their motivations to launch abusiness. And only 18 percent of respondents said that taking a technology they already had developed in the laband trying to see if it could make an impact was an important, very important, or extremely important motivatortoward their business launch.

Figure 21: Inability to Find Traditional Employment

Percentage0 20 40 60 80 1000



Important factor


Not at all a factor

N/A

1.3%

11.3%

80.3%

3.8%

0.9%

2.3%

Figure 22: Co-Founder Encouraged Me to Become a Partner and Start Our Company

Percentage0 10 20 30 40 500 10



Important factor


Not at all a factor

N/A

6.8%

15.1%

44.0%

13.0%

13.2%

7.9%

Figure 23: Developed a Technology in a Laboratory Environment and Wanted to See it Make an Impact

Percentage0 10 20 30 40 50 600 10 20



Important factor


Not at all a factor

N/A

8.0%

21.0%

50.9%

10.0%

5.9%

4.2%

Figure 24: An Entrepreneurial Friend or Family Member Was a Role Model

Percentage0 5 10 15 20 25 30 35 400 5 1



Important factor


Not at all a factor

N/A

9.2%

12.3%

16.2%

18.5%

35.1%

8.7%

With regard to the impact of role modelssuch as family members or entrepreneurfriends, 37.8 percent of respondentsindicated they played an important, veryimportant, or extremely important role in thedecision to start a company.



Most had significant industry experience whenstarting their companies

The majority of respondents (75.4 percent) hadworked as employees at other companies for morethan six years before launching their owncompanies. The highest percentage of entrepreneurs(52.2 percent) launched their companies afterworking as employees for other companies forbetween one and ten years. However, significantpercentages of respondents started their firstcompanies after working eleven to fifteen years(23.3 percent), sixteen to twenty years (14.3percent), or greater than twenty years (10.3 percent)for someone else. In other words, whileentrepreneurs do tend to launch companies early intheir careers on average, significant portions (47.9percent) wait until much later in their careers, afterpassing ten-plus years in the workforce beforelaunching a company.

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

20+ years

16–20 years

Percentage0 5 10 15 20 25 30

24.6%

27.6%

23.3%

14.3%

10.3%

Early entrepreneurs and those with an earlyinterest in entrepreneurship are different

We analyzed the number of years an entrepreneurhad worked for someone else before launching hisor her own business. Key differences emerged.Entrepreneurs who started their companies soonafter graduating (with zero to five years of workexperience) and those who had an extremely stronginterest in entrepreneurship in college were far lesslikely to be married (36.6 percent vs. the totalsample average of 69.9 percent) or to have childrenwhen they launched their first businesses (26.9percent vs. the total sample average of 59.6percent). The respondents who said that they were“extremely interested” in starting a company whilein college were far more likely to be earlyentrepreneurs. Sixty-nine percent started their owncompanies within ten years of working for someoneelse (as compared to 46.8 percent from the rest ofthe population). Generally, we saw a correlationbetween the level of interest in entrepreneurshipduring college and the number of years workedbefore starting a business. For instance, only 18percent from the “extremely interested” groupworked for at least fifteen years before starting theirown businesses, as compared to 46.4 percent fromthe “not very interested” group.

Figure 26: Time Taken to Start a Company for Those with Extreme Interest in Entrepreneurship in College vs. Overall Population

20+ years

16–20 years

11–15 years

8–10 years

0–5 years

0 10 20 30 40 50Percentage

“Extremely Interested” in Starting a Company While in CollegeOverall Population: Excluding the “Extremely Interested” Group

6.0%11.7%

12.0%

19.3%41.4%

27.5%27.8%

27.0%12.8%

14.5%.0%1

14

0 10 20

6.0%61

Figure 30: Level of Motivation as Wanting to Own Their Company in Serial Entrepreneurs vs. Overall Population

0 5 10 15 20 25 30 35 40Percentage

Serial EntrepreneursOverall Population–Excluding Serial Entrepreneurs



Important factor


Not at all a factor

N/A

0

35.2%

1.8%1.9%

18.2%11.9%

20.4%13.2%

21.6%18.2%

13.7%19.5%

24.3%



Figure 28: Number of Years Worked Before Launching First Business by Marital Status

20+ years

16–20 years

11–15 years

8–10 years

0–5 years

0 20 40 60 80 100Percentage

SingleMarried

10.9%

36.6%57.3%

68.7%25.9%

85.5%8.9%

90.7%5.3%

85.5%0.9%10

8

99990995.3%5

88888.9%8

65.9%2

0 20 4

Figure 27: Level of Interest in Entrepreneurship in College vs. Number of Years Worked Before Starting First Business


Somewhat interested


Not very interested


0 10 20 30 40 500 10

0–5 years6–10 years11– 15 years16–20 years20+ years

Percentage

Serial entrepreneurs: extremely interested in starting business in college and motivated by wanting toown a companyRespondents who were “extremely interested” in entrepreneurship during college were more likely to start morethan two companies (47.1 percent vs. an average of 28 percent from the rest of the population). Serialentrepreneurs also indicated that they always wanted their own companies (73 percent vs. an average of 59.6percent from the rest of the population).

Figure 29: Number of Companies Started by Entrepreneurs Who Were Extremely Interested in Entrepreneurship in College vs. Overall Population

5 or more

4

3

2

1

0 10 20 30 40 50Percentage

“Extremely Interested” in Entrepreneurship During Higher EducationOverall Population: Excluding “Extremely Interested” Group

44.6%

12.4%

31.4%

27.4%21.5%

14.8%22.3%

7.0%

12.4%6.2%6666666

11

0 10 20 30 404

31.4%3

1.5%2



Respondents from a “lower-upper-class”background: more likely to be driven bywealth or wanting own company andinterested in entrepreneurship during college

Fifty percent of respondents who came from a “lower-upper-class” background said that wealthwas an extremely important or very importantmotivator for starting their own businesses, ascompared to 42.6 percent of the overallpopulation. People from this background weremore likely to be driven by always wanting theirown companies (78.6 percent vs. the overallsample average of 63.5 percent). Also, 41.4percent of them indicated that they were“extremely interested” in entrepreneurship duringcollege as compared to the overall sample averageof 24.5 percent.

Figure 31: Level of Motivation to Build Wealth in Respondents from “Lower-Upper-Class” Background vs. Overall Population



Important factor


Not at all a factor

0 5 10 15 20 25 30 35Percentage

Lower-Upper ClassOverall Population–Excluding Respondents from “Lower-Upper-Class” Backgrounds

25.0%

8.2%7.1%

17.1%10.7%

32.1%

24.5%25.0%

18.1%

32.1%

11171110.7%1

088

32.1%

Figure 32: Level of Interest in Entrepreneurship During College by Those with “Lower-Upper-Class” Backgrounds vs. Overall Population


Somewhat interested


Not very interested


0 10 20 30 40 50Percentage

Lower-Upper ClassOverall Population–Excluding Respondents from “Lower-Upper-Class” Backgrounds

41.4%

7.6%

0.0%

3.4%

5.7%

35.3%27.6%

27.5%27.6%

23.9%22

335327.6%

0.0%55.55

0

3.4%3

Analysis and Conclusions



Analysis and Conclusions The core findings of this research are straightforward and contradict

some prevailing stereotypes. In the industries we researched,entrepreneurs are more likely to come from a middle-class or upper-lower-class background, and very few come from backgrounds ofextreme wealth or extreme poverty. These entrepreneurs are usually well-educated, with only 5 percent reporting having less than a bachelor’sdegree. They also are likely to be better educated than their parentswere, with half their fathers and a third of their mothers having at leastbachelors’ degrees. They performed well in high school and in college,with the vast majority ranking average or above in their respectiveinstitutions. Entrepreneurs don't always come from families ofentrepreneurs; slightly more than half of our sample were the first intheir families to launch businesses. On average, entrepreneurs tend to bethe middle child in a three-child household. They are significantly morelikely to be married and have children when they launch their firstbusinesses. Entrepreneurs are far more likely to have worked for anemployer for more than six years than to have quickly launched theirown businesses. Their primary motivations for launching a business areto build wealth, to own their own company, and to capitalize on abusiness idea they had.

The findings perhaps provide some clues about what conditions mightbe helpful in supporting entrepreneurs and helping them becomesuccessful. Entrepreneurs typically are well-educated and experienced. Inother words, they largely come from the existing workforce and not fromcollege. They have ideas they want to commercialize, are motivated tobuild wealth, and like the idea of being their own bosses in a startup.These observations are based on initial analysis of the data; we areplanning further detailed analysis of the dataset. But these observationscould perhaps be useful guideposts for the next round of inquiry thatattempts to understand not only the background and broad motivationsof entrepreneurs but also the deeper formative factors that influence thisselect and incredibly important class of individuals.

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Anatomy of an Entrepreneur

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