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

Studies show that the psychological propensities for male and female entrepreneurs are more similar than different. Empirical studies suggest that female entrepreneurs possess strong negotiating skills and consensus-forming abilities. Entrepreneurs may also be driven to entrepreneurship by past experiences. If they have faced multiple work stoppages or have been unemployed in the past, the probability of them becoming an entrepreneur increases [] Per Cattell's personality framework, both personality traits and attitudes are thoroughly investigated by psychologists.

However, in case of entrepreneurship research these notions are employed by academics too, but vaguely. According to Cattell, personality is a system that is related to the environment and further adds that the system seeks explanation to the complex transactions conducted by both—traits and attitudes. This is because both of them bring about change and growth in a person.

Personality is that which informs what an individual will do when faced with a given situation. Innovative entrepreneurs may be more likely to experience what psychologist Mihaly Csikszentmihalyi calls " flow ". Csikszentmihalyi suggested that breakthrough innovations tend to occur at the hands of individuals in that state. Research on high-risk settings such as oil platforms, investment banking, medical surgery, aircraft piloting and nuclear power plants has related distrust to failure avoidance.

This research was extended to entrepreneurial firms by Gudmundsson and Lechner.


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They found that the firms of distrusting entrepreneurs were more likely to survive than the firms of optimistic or overconfident entrepreneurs. The reasons were that distrusting entrepreneurs would emphasize failure avoidance through sensible task selection and more analysis. Kets de Vries has pointed out that distrusting entrepreneurs are more alert about their external environment. Similarly, Gudmundsson and Lechner found that distrust leads to higher precaution and therefore increases chances of entrepreneurial firm survival.

Researchers Schoon and Duckworth completed a study in that could potentially help identify who may become an entrepreneur at an early age. They determined that the best measures to identify a young entrepreneur are family and social status, parental role modeling, entrepreneurial competencies at age 10, academic attainment at age 10, generalized self-efficacy, social skills, entrepreneurial intention and experience of unemployment. Some scholars have constructed an operational definition of a more specific subcategory called "Strategic Entrepreneurship".

Closely tied with principles of strategic management, this form of entrepreneurship is "concerned about growth, creating value for customers and subsequently creating wealth for owners". The model's three steps entail the collection of different resources, the process of orchestrating them in the necessary manner and the subsequent creation of competitive advantage, value for customers, wealth and other benefits.

Leadership in entrepreneurship can be defined as "process of social influence in which one person can enlist the aid and support of others in the accomplishment of a common task" [] in "one who undertakes innovations, finance and business acumen in an effort to transform innovations into economic goods". Entrepreneurship in itself can be defined as "the process by which individuals, teams, or organizations identify and pursue entrepreneurial opportunities without being immediately constrained by the resources they currently control".

At the core, an entrepreneur is a decision maker. Such decisions often affect an organization as a whole, which is representative of their leadership amongst the organization. With the growing global market and increasing technology use throughout all industries, the core of entrepreneurship and the decision-making has become an ongoing process rather than isolated incidents. This becomes knowledge management which is "identifying and harnessing intellectual assets" for organizations to "build on past experiences and create new mechanisms for exchanging and creating knowledge".

It is a common mantra for one to learn from their past mistakes, so leaders should take advantage of their failures for their benefit. This is how one may take their experiences as a leader for the use in the core of entrepreneurship-decision making. The majority of scholarly research done on these topics have been from North America. For example, in North America a leader is often thought to be charismatic, but German culture frowns on such charisma due to the charisma of Nazi leader Adolf Hitler.

Other cultures, like some European countries, view the term "leader" negatively, like the French. For countries like that, an authoritarian approach to management and leadership is more customary. Despite cultural differences, the successes and failures of entrepreneurs can be traced to how leaders adapt to local conditions. Michelacci and Schivardi [] are a pair of researchers who believe that identifying and comparing the relationships between an entrepreneur's earnings and education level would determine the rate and level of success.

Their study focused on two education levels, college degree and post-graduate degree. While Michelacci and Schivardi do not specifically determine characteristics or traits for successful entrepreneurs, they do believe that there is a direct relationship between education and success, noting that having a college knowledge does contribute to advancement in the workforce. Michelacci and Schivardi state there has been a rise in the number of self-employed people with a baccalaureate degree.

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However, their findings also show that those who are self-employed and possess a graduate degree has remained consistent throughout time at about 33 percent. They briefly mention those famous entrepreneurs like Steve Jobs and Mark Zuckerberg who were college dropouts, but they call these cases all but exceptional as it is a pattern that many entrepreneurs view formal education as costly, mainly because of the time that needs to be spent on it. Michelacci and Schivardi believe that in order for an individual to reach the full success they need to have education beyond high school.

Their research shows that the higher the education level the greater the success. The reason is that college gives people additional skills that can be used within their business and to operate on a higher level than someone who only "runs" it. An entrepreneurial resource is any company-owned asset that has economic value creating capabilities. Economic value creating both tangible and intangible sources are considered as entrepreneurial resources.

Their economic value is generating activities or services through mobilization by entrepreneurs. Tangible resources are material sources such as equipment, building, furniture, land, vehicle, machinery, stock, cash, bond and inventory that has a physical form and can be quantified. On the contrary, intangible resources are nonphysical or more challenging to identify and evaluate, and they possess more value creating capacity such as human resources including skills and experience in a particular field, organizational structure of the company, brand name, reputation, entrepreneurial networks that contribute to promotion and financial support, know-how , intellectual property including both copyrights , trademarks and patents.

At least early on, entrepreneurs often "bootstrap-finance" [] their start-up rather than seeking external investors from the start. One of the reasons that some entrepreneurs prefer to "bootstrap" is that obtaining equity financing requires the entrepreneur to provide ownership shares to the investors. If the start-up becomes successful later on, these early equity financing deals could provide a windfall for the investors and a huge loss for the entrepreneur. If investors have a significant stake in the company, they may as well be able to exert influence on company strategy, chief executive officer CEO choice and other important decisions.

This is often problematic since the investor and the founder might have different incentives regarding the long-term goal of the company. An investor will generally aim for a profitable exit and therefore promotes a high-valuation sale of the company or IPO to sell their shares.

Whereas the entrepreneur might have philanthropic intentions as their main driving force. Soft values like this might not go well with the short-term pressure on yearly and quarterly profits that publicly traded companies often experience from their owners.


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One consensus definition of bootstrapping sees it as "a collection of methods used to minimize the amount of outside debt and equity financing needed from banks and investors". In addition, bootstrapping entrepreneurs often incur personal credit-card debt, but they also can utilize a wide variety of methods. While bootstrapping involves increased personal financial risk for entrepreneurs, the absence of any other stakeholder gives the entrepreneur more freedom to develop the company. Bootstrapping methods include: []. Many businesses need more capital than can be provided by the owners themselves.

In this case, a range of options is available including a wide variety of private and public equity, debt and grants. Private equity options include:. Entrepreneurs are faced with liquidity constraints and often lack the necessary credit needed to borrow large amounts of money to finance their venture.

The studies fall into two camps: the first camp finds that taxes help and the second argues that taxes hurt entrepreneurship. Cesaire Assah Meh found that corporate taxes create an incentive to become an entrepreneur to avoid double taxation. Donald Bruce and Mohammed Mohsin found that it would take a 50 percentage point drop in the top tax rate to produce a one percent change in entrepreneurial activity. Factors that may predict entrepreneurial success include the following: []. From Wikipedia, the free encyclopedia. For other uses, see Entrepreneur disambiguation.

Process of designing, launching and running a new business. Economic systems. Economic theories. Related topics. Anti-capitalism Capitalist state Consumerism Crisis theory Criticism of capitalism Cronyism Culture of capitalism Exploitation Globalization History History of theory Market economy Periodizations of capitalism Perspectives on capitalism Post-capitalism Speculation Spontaneous order Venture philanthropy. Anarcho-capitalism Authoritarian capitalism Democratic capitalism Dirigism Eco-capitalism Humanistic capitalism Inclusive capitalism Liberal capitalism Liberalism Libertarian capitalism Neo-capitalism Neoliberalism Objectivism Ordoliberalism Right-libertarianism Social democracy.

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