Racing to be an Entrepreneur
In a recent YEC/Buzz Marketing study of young professionals, 79% of respondents were interested in entrepreneurship. Anyone, Generation Y or not, who read about Facebook’s suggested IPO market capitalization of up to $100 billion, garnering $28 billion of value for founder Mark Zuckerberg alone, could understandably become giddy at the thought of starting their own business. And while most of us don’t presume we’ll be in Zuckerberg’s league, we believe that gaining a fraction of that success would be just fine.
As a banker who financed start-ups for 15 years, I have great respect for those who can take an idea and monetize it. The trend I am concerned about now though is young professionals jumping into a start-up before they have developed the optimal mix of experience and motivation. TechCrunch reported on findings from The Founder Institute that older age correlates with more successful startups up to the age of 40, after which it has limited or no impact. Of course, motivation and determination is also key for the success of any start-up and younger professionals may trump older, perhaps more jaded, executives when it comes to drive. So the sweet spot for starting your own business is when your high motivation intersects with your sufficiently high specialized experience.
When my colleagues and I looked for potentially successful business models to finance, some of the important factors related to the manager’s experience included:
1. Manager experience within the same arena as the new business
2. Longevity of business relationship between key individuals
3. Manager willingness to invest a meaningful amount of his/her own capital into the business
4. Manager focus on business relative to other professional distractions
5. Industry references
Don’t lose that entrepreneurial spirit but don’t minimize the contribution that education and experience can play in the success of your business. And your extra years at school or work will create a more robust business network for you to rely on during your start-up phase.
Share your start-up thoughts in the Reply Box below. Are you ready to go or do you plan to turn into an entrepreneur in the years ahead?