View source for Entrepreneurship

{{Redirect|Entrepreneur}}
{{Redirect|Co-founder|someone who cultivates a startup|Startup company#Co-founders}}
{{Use dmy dates|date=July 2017}}
'''Entrepreneurship''' is the process of designing, launching and running a new [[business]], which is more often than not, initially a [[small business]], offering a product, process or service for sale or hire. The people who create these businesses are called '''entrepreneurs'''.<ref>{{cite journal |author1= AK Yetisen |author2= LR Volpatti |author3= AF Coskun |author4= S Cho |author5= E Kamrani |author6= H Butt |author7= A Khademhos\\seini |author8= SH Yun |title= Entrepreneurship |journal= Lab Chip |volume= 15 |issue= 18 |pages= 3638–60 |doi= 10.1039/c5lc00577a |pmid= 26245815 |url= http://pubs.rsc.org/en/content/articlelanding/2015/lc/c5lc00577a|year= 2015 }}</ref>{{qn|date=July 2017}}<ref name="moves">{{cite journal|last1= Riitta Katila, Eric L. Chen,|first1= and Henning Piezunka|title= All the right moves: How entrepreneurial firms compete effectively|journal= Strategic Entrepreneurship Jnl|date= 7 June 2012|volume= 6|issue= 2|doi= 10.1002/sej.1130|url= http://web.stanford.edu/~rkatila/new/pdf/KatilaSEJ12.pdf|accessdate= 18 May 2017|pages= 116–132}}</ref> Entrepreneurship has been described as the "capacity and willingness to develop, organize and manage a business venture along with any of its risks in order to make a [[profit (accounting)|profit]]".<ref name="businessdictionary.com">{{cite web|url= http://www.businessdictionary.com/definition/entrepreneurship.html#ixzz3xv9ci0nt|title= Business Dictionary definition|publisher= Business Dictionary }}</ref> While definitions of entrepreneurship typically focus on the launching and running of businesses, due to the high risks involved in launching a start-up, a significant proportion of businesses have to close, due to "lack of funding, bad business decisions, an economic crisis – or a combination of all of these"<ref>{{cite web|url= https://www.entrepreneur.com/article/224113|title= How to Properly Close Your Business|first= Mikal E.|last= Belicove|date= 2 August 2012|publisher= }}</ref> or due to lack of market demand. In the 2000s, the definition of "entrepreneurship" expanded to explain how and why some individuals (or teams) identify opportunities, evaluate them as viable and then decide to exploit them, whereas others do not<ref>{{cite journal|last1= Scott|first1= S.|last2= Venkatraman|first2= S.|title= The promise of entrepreneurship as a field of research|journal= Academy of Management Review|date= 2000|volume= 25|pages= 217–226}}</ref> and, in turn, how entrepreneurs use these opportunities to develop new products or services, launch new firms or even new industries and create [[wealth]].<ref>{{cite journal|last1= Brush|first1= C.|title= Doctoral education in the field of entrepreneurship|journal= Journal of Management|volume= 29|issue= 3|pages= 309–331|display-authors= etal|doi= 10.1016/s0149-2063(03)00014-x|year= 2003}}</ref> Recent{{when|date=July 2017}} advances stress the fundamentally uncertain nature of the entrepreneurial process, because although opportunities exist their existence cannot be discovered or identified prior to their actualization into profits.<ref>{{cite journal|last1= Ramoglou|first1= S.|last2= Tsang|first2= E.W.K.|title= A realist perspective of entrepreneurship: Opportunities as propensities|journal= Academy of Management Review|volume= 41|issue= 3|pages= 409–434|display-authors= etal|doi= 10.5465/amr.2014.0281|year= 2016}}</ref> What appears as a real opportunity ex ante might actually be a non-opportunity or one that cannot be actualized by entrepreneurs lacking the necessary business skills, financial or social capital.

An entrepreneur has been defined{{by whom|date=July 2017}} as, "a person who starts, organizes and manages any enterprise, especially a business, usually with considerable initiative and risk; running a [[small business]] with all the risk and reward of any given business process".<ref>{{cite web|url= http://dictionary.reference.com/browse/entrepreneurship|title= the definition of entrepreneurship|publisher= }}</ref><ref>{{cite web|url= http://www.investopedia.com/terms/e/entrepreneur.asp#ixzz3yfNOKdsp|title= Entrepreneur|first= Investopedia|last= Staff|date= 1 May 2006|publisher= }}</ref> Entrepreneurs tend to be good at perceiving new [[Business opportunity|business opportunities]] and they often exhibit positive [[biases]] in their perception (i.e., a bias towards finding new possibilities and seeing unmet market needs) and a pro-risk-taking attitude that makes them more likely to exploit the opportunity.<ref name="onlinelibrary.wiley.com">{{cite journal |author1= S.X. Zhang |author2=J . Cueto |title= The Study of Bias in Entrepreneurship |journal= Entrepreneurship Theory and Practice |volume= 41 |issue= 3 |pages=  419–454 |doi= 10.1111/etap.12212  |url= http://onlinelibrary.wiley.com/doi/10.1111/etap.12212/abstract|year= 2015 }}</ref><ref>{{cite journal|last1= Black|first1= Ervin L.|last2= Burton|first2= F. Greg|last3= Wood|first3= David A.|last4= Zimbelman|first4= Aaron F.|title= Entrepreneurial success: differing perceptions of entrepreneurs and venture capitalists|journal= The International Journal of Entrepreneurship and Innovation|date= August 2010|volume= 11|issue=3|pages= 189–198|doi= 10.5367/000000010792217272|url= http://www.ingentaconnect.com/content/ip/ije/2010/00000011/00000003/art00002|accessdate= 28 July 2016}}</ref> An entrepreneur may be in control of a commercial undertaking, directing the [[factors of production]] – the [[human resources|human]], [[Financing|financial]] and material resources – that are required to exploit a business opportunity. Entrepreneurs act as managers and oversee the launch and growth of an enterprise. Entrepreneurship is the process by which either an individual or a team identifies a business opportunity and acquires and deploys the necessary resources required for its exploitation. The exploitation of entrepreneurial opportunities may include:<ref>{{cite book |first= Robert D. |last= Hisrich |title= Entrepreneurship|url= {{google books |plainurl=y |id= s01P0agnLPUC}}|year= 2011|publisher= McGraw-Hill Education|isbn= 978-0-07062-017-9}}</ref>
* developing a [[business plan]]
* hiring the [[human resources]]
* acquiring financial and material resources
* providing leadership
* being responsible for both the venture's success or failure
* [[risk aversion]]

The Economist [[Joseph Schumpeter]] (1883–1950) saw the role of the entrepreneur in the economy as "[[creative destruction]]" – launching innovations that simultaneously destroy old industries while ushering in new industries and approaches. For Schumpeter, the changes and "dynamic [[Economic equilibrium#Disequilibrium|disequilibrium]] brought on by the innovating entrepreneur [were] the norm of a healthy [[economy]]".<ref>{{cite web|url= http://www.conferenceboard.ca/hcp/provincial/innovation/ambition.aspx|title= Entrepreneurial Ambition - Innovation Provincial Rankings - How Canada Performs|publisher= }}</ref>

While ''Entrepreneurial spirit'' may be characterized as being "by innovation and risk-taking",<ref name="businessdictionary.com"/> entrepreneurship is often associated with new, small, for-profit start-ups, entrepreneurial behavior can be seen in small-, medium- and large-sized firms, new and established firms and in for-profit and not-for-profit organizations, including voluntary-sector groups, [[charitable organization]]s and [[Civil service|government]].<ref>{{cite web|last1= Clifford|first1= Catherine|title= Why everyone will have to become an entrepreneur|url= https://www.entrepreneur.com/article/228176|website= entrepreneur.com|accessdate= 8 May 2016}}</ref>

Entrepreneurship may operate within an [[entrepreneurship ecosystem]] which often includes:

* government programs and services that promote entrepreneurship and support entrepreneurs and start-ups
* non-governmental organizations such as small-business associations and organizations that offer advice and mentoring to entrepreneurs (e.g., through entrepreneurship centers or websites)
* small-business [[advocacy organization]]s that lobby governments for increased support for entrepreneurship programs and more small business-friendly laws and regulations
* entrepreneurship resources and facilities (e.g., [[business incubator]]s and [[seed accelerator]]s)
* entrepreneurship education and training programs offered by schools, colleges and universities
* financing (e.g., bank loans, [[venture capital financing]], [[angel investing]] and government and private foundation grants)<ref name=VentureCapitalNY1>
{{cite web
|url= http://nvca.org/research/venture-investment/
|title= Venture Investment - Regional Aggregate Data
|publisher= National Venture Capital Association and PricewaterhouseCoopers
|accessdate= 23 April 2016
}}
</ref>{{qn|date=July 2017}}

{{Capitalism}}

== History ==

=== Historical usage ===
[[File:Wimbit-Jellinek-Phoenix8hp.jpg|thumb|200px| [[Emil Jellinek|Emil Jellinek-Mercedes]] (1853–1918), at the steering wheel of his Phoenix Double-Phaeton, was a European entrepreneur who helped design the first modern car.]]

''Entrepreneur'' ({{IPAc-en|audio=en-us-entrepreneur.ogg|ˌ|ɒ|n|t|r|ə|p|r|ə|ˈ|n|ɜː}}), is a [[loanword]] from [[French language|French]]. First used in 1723, today the term implies qualities of leadership, initiative, and innovation in new venture design. Economist [[Robert Reich]] has called team-building, leadership, and management ability essential qualities for the entrepreneur.<ref name= Entrepreneurship>{{cite book|editor-first= Paul|editor-last= Muljadi|title=Entrepreneurship|url={{google books |plainurl=y |id=eNy7hA-rvOUC}}|publisher=Paul Muljadi}}</ref><ref>{{cite book|last=Crainer|first=Stuart|author-link1=Stuart Crainer|last2=Dearlove|first2=Des|author-link2=Des Dearlove|title=Generation Entrepreneur|publisher=FT Press|year=2000|page=202}}</ref> Historically the study of entrepreneurship reaches back to the work in the late 17th and early 18th centuries of [[Richard Cantillon]], which was foundational to [[classical economics]].

=== 20th century ===

In the 20th century, entrepreneurship was studied by [[Joseph Schumpeter]] in the 1930s and other [[Austrian school|Austrian economists]] such as [[Carl Menger]], [[Ludwig von Mises]] and [[Friedrich von Hayek]]. The term "entrepreneurship" was coined around the 1920s, while the loan from French of the word ''entrepreneur'' dates to the 1850s. According to Schumpeter, an entrepreneur is willing and able to convert a new idea or [[invention]] into a successful innovation.<ref name="Schumpeter1976">{{cite book|first=Joseph Alois |last=Schumpeter|title=Capitalism, Socialism and Democracy|url={{google books |plainurl=y |id=6eM6YrMj46sC}}|year=1976|publisher=Routledge|isbn=978-0-415-10762-4}}</ref> Entrepreneurship employs what Schumpeter called "the gale of [[creative destruction]]" to replace in whole or in part inferior offerings across markets and industries, simultaneously creating new products and new [[business model]]s. Thus, creative destruction is largely responsible for long-term [[economic growth]]. The idea that entrepreneurship leads to economic growth is an interpretation of the residual in [[endogenous growth theory]]{{clarify|date=October 2013}} and as such continues to be debated in academic economics. An alternate description by [[Israel Kirzner]] suggests that the majority of innovations may be incremental improvements such as the replacement of paper with plastic in the construction of a drinking straw that require no special qualities.

For Schumpeter, entrepreneurship resulted in new industries and in new combinations of currently existing inputs. Schumpeter's initial example of this was the combination of a steam engine and then current wagon making technologies to produce the horseless carriage. In this case, the innovation, the car, was transformational but did not require the development of dramatic new technology. It did not immediately replace the horse-drawn carriage, but in time, incremental improvements reduced the cost and improved the technology, leading to the modern auto industry. Despite Schumpeter's early 20th-century contributions, the traditional [[microeconomic]] theory did not formally consider the entrepreneur in its theoretical frameworks (instead of assuming that resources would find each other through a price system). In this treatment, the entrepreneur was an implied but unspecified actor, consistent with the concept of the entrepreneur being the agent of [[x-efficiency]].

For Schumpeter, the entrepreneur did not bear risk: the capitalist did. Schumpeter believed that the equilibrium was imperfect. Schumpeter (1934) demonstrated that the changing environment continuously provides new information about the optimum allocation of resources to enhance profitability. Some individuals acquire the new information before others and recombine the resources to gain an entrepreneurial profit. Schumpeter was of the opinion that entrepreneurs shift the [[Production Possibility Curve]] to a higher level using innovations.<ref name="Schumpeter1934">{{cite book|first=Joseph Alois |last=Schumpeter |authorlink=Joseph Schumpeter |title=The Theory of Economic Development: An Inquiry Into Profits, Capital, Credit, Interest, and the Business Cycle|url={{google books |plainurl=y |id=-OZwWcOGeOwC}}|year=1934|publisher=Transaction Publishers|isbn=978-0-87855-698-4}}</ref>

Initially, economists made the first attempt to study the entrepreneurship concept in depth.<ref name="Landstrom2007">{{cite book|first=H. |last=Landstrom|title=Pioneers in Entrepreneurship and Small Business Research|url={{google books |plainurl=y |id=oSjccQt5zTsC}}|date=31 December 2007|publisher=Springer|isbn=978-0-387-23633-9}}</ref>  [[Richard Cantillon]] (1680–1734) considered the entrepreneur to be a risk taker who deliberately allocates resources to exploit opportunities in order to maximize the financial return.<ref name="Cantillon, R. 1931">{{cite book|last=Cantillon |first=Richard |authorlink=Richard Cantillon |year=1755 |title=Essai sur la nature du commerce en général |location=London |publisher=MacMillan}}</ref><ref>{{cite book|last1=Stevenson |first1=H. |last2=Jarillo |first2=J. |title=A Paradigm of Entrepreneurship: Entrepreneurial Management, in |editor1-first=Álvaro |editor1-last=Cuervo|editor2-first=Domingo |editor2-last=Ribeiro|editor3-first=Salvador |editor3-last=Roig|work=Entrepreneurship: Concepts, Theory and Perspective|url={{google books |plainurl=y |id=2v-aWpdgoPQC |pg=5}}|date=26 May 2007|publisher=Springer Science Business Media|isbn=978-3-540-48543-8|pages=5–}}</ref> Cantillon emphasized the willingness of the entrepreneur to assume risk and to deal with uncertainty. Thus, he draws attention to the function of the entrepreneur, and distinguishes clearly between the function of the entrepreneur and the owner who provides the money.<ref name="Cantillon, R. 1931"/><ref name="Landström, H. 2005">• Landström, H. & SpringerLink 2005, Pioneers in entrepreneurship and small business research, Springer Science+Business Media, New York, N.Y.</ref> Alfred Marshall viewed the entrepreneur as a multi-tasking capitalist. He observed that in the equilibrium of a completely competitive market, there was no spot for "entrepreneurs" as an economic activity creator.<ref>{{cite book|first1=Alfred |last1=Marshall |author1-link=Alfred Marshall |first2=C. W. |last2=Guillebaud|title=Principles of Economics. 9th (variorum) Ed|url={{google books |plainurl=y |id=97iZXwAACAAJ}}|year=1961|publisher=Macmillan}}</ref>

=== Historical barriers ===
Dating back to the time of the medieval [[guilds]] in Germany, a [[craftspeople|craftsperson]] required special permission to operate as an entrepreneur was the small proof of competence (Kleiner Befähigungsnachweis), which restricted training of apprentices to craftspeople who held a [[Meister]] certificate. This institution was introduced in 1908 after a period of so-called freedom of trade (Gewerbefreiheit, introduced in 1871) in the [[German Reich]]. However, proof of competence was not required to start a business. In 1935 and in 1953, greater proof of competence was reintroduced (Großer Befähigungsnachweis Kuhlenbeck), which required craftspeople to obtain a [[Meister]] apprentice-training certificate before being permitted to set up a new business.<ref>[https://link.springer.com/article/10.1007/s00181-013-0773-7 Rostam-Afschar, D. (2013) "Entry regulation and entrepreneurship: a natural experiment in German craftsmanship"] (PDF; 495&nbsp;kB)</ref>

===Millennial entrepreneurs===

The term "millennial entrepreneur" refers to a business owner who is affiliated with the generation that was brought up using digital technology and mass media; the products of [[Baby Boomers]], those people born during the 1980s and early 1990s. Also known as [[Generation y]], these business owners are well equipped with knowledge of technology and have a strong grasp of its applications toward businesses.
There have been many breakthrough businesses that have come from millennial entrepreneurs such as [[Mark Zuckerberg]], who created [[Facebook]].<ref>{{Cite news|url=https://www.inc.com/zoe-henry/the-richest-millennial-entrepreneurs-in-america.htm.html|title=The 10 Richest Millennial Entrepreneurs in America|last=|first=|date=December 12, 2016|work=Inc.com|access-date=June 6, 2017|archive-url=|archive-date=|dead-url=|language=en}}</ref> <ref>{{Cite web|url=https://dvaughnbell.com/entrepreneur/top-successful-millennial-entrepreneurs/|title=Top Successful Millennial Entrepreneurs|last=Bell|first=D'Vaughn|access-date=October 16, 2017}}</ref>
Despite the expectation of millennial success, there have been recent studies that have proven this to not be the case.  The comparison between millennials who are self-employed and those who are not self-employed shows that the latter is higher. The reason for this is because they have grown up in a different generation and attitude than their elders.  Some of the barriers to entry for entrepreneurs are the economy, debt from schooling, and the challenges of regulatory compliance.<ref>{{Cite web|url=https://www.sba.gov/sites/default/files/advocacy/Millenial_IB.pdf|title=The Missing Millennial Entrepreneurs|last=Wilmouth|first=Daniel|date=|website=U.S. Small Business Administration|archive-url=|archive-date=|dead-url=|access-date=June 2, 2017}}</ref>

===2000s===
[[File:Ambassador Verveer Greets African Womens Entrepreneurship Program Participants.jpg|thumb|right|In 2012, Ambassador-at-Large for Global Women's Issues [[Melanne Verveer]] greets participants in an African Women's Entrepreneurship Program at the [[State Department]] in Washington, D.C.]]
In the 2000s, entrepreneurship has been extended from its origins in for-profit businesses to include [[social entrepreneurship]], in which business goals are sought alongside social, environmental or humanitarian goals, and even the concept of the [[political entrepreneur]].{{according to whom|date=August 2013}} Entrepreneurship within an existing firm or large organization has been referred to as [[intrapreneurship]] and may include corporate ventures where large entities "spin off" subsidiary organizations.<ref>{{cite book |first=Scott Andrew |last=Shane |title=A General Theory of Entrepreneurship: The Individual-opportunity Nexus|url={{google books |plainurl=y |id=0FxO_Wsh30kC}}|year=2000|publisher=Edward Elgar Publishing|isbn=978-1-78100-799-0}}</ref>

Entrepreneurs are leaders willing to take risk and exercise initiative, taking advantage of market opportunities by planning, organizing, and deploying resources,{{sfn|Deakins|Freel|2012}} often by innovating to create new or improving existing products or services.<ref>{{Cite journal|author=Johnson, D. P. M. |title=A Glossary of Political Economy Terms, 2005 |year=2005 |publisher=Auburn University |url=https://libraries.ucsd.edu/info/resources/glossary-political-economy-terms |deadurl=yes |archiveurl=https://web.archive.org/web/20140720225149/https://libraries.ucsd.edu/info/resources/glossary-political-economy-terms |archivedate=20 July 2014 |df=dmy }}</ref> In the 2000s, the term "entrepreneurship" has been extended to include a specific [[mindset]] (see also [[entrepreneurial mindset]]) resulting in entrepreneurial initiatives, e.g. in the form of [[social entrepreneurship]], [[political entrepreneur]]ship, or [[knowledge entrepreneurship]].

According to Paul Reynolds, founder of the [[Global Entrepreneurship Monitor]], "by the time they reach their retirement years, half of all working men in the United States probably have a period of self-employment of one or more years; one in four may have engaged in self-employment for six or more years. Participating in a new business creation is a common activity among U.S. workers over the course of their careers".<ref>{{cite book |author=Paul D. Reynolds |title=Entrepreneurship in the United States: The Future Is Now |url={{google books |plainurl=y |id=gPBP7oP9-p4C}}|date=30 September 2007|publisher=Springer|isbn=978-0-387-45671-3}}</ref> In recent years, entrepreneurship has been claimed as a major driver of [[economic growth]] in both the United States and Western Europe.

Entrepreneurial activities differ substantially depending on the type of organization and creativity involved. Entrepreneurship ranges in scale from solo, part-time projects to large-scale undertakings that involve a team and which may create many jobs. Many "high value" entrepreneurial ventures seek [[venture capital]] or [[angel investor|angel funding]] ([[seed money]]) in order to raise [[capital (economics)|capital]] for building and expanding the business.<ref>{{cite book |author1=Mark Van Osnabrugge |author2=Robert J. Robinson |title=Angel Investing |year=2000 |publisher=John Wiley & Sons |isbn=0-7879-5202-8 }}</ref> Many organizations exist to support would-be entrepreneurs, including specialized government agencies, [[business incubator]]s (which may be for-profit, non-profit, or operated by a college or university), [[science park]]s, and [[Non-governmental organization]]s, which include a range of organizations including not-for-profits, charities, foundations and business advocacy groups (e.g., [[Chamber of Commerce|Chambers of Commerce]]). Beginning in 2008, an annual "[[Global Entrepreneurship Week]]" event aimed at "exposing people to the benefits of entrepreneurship" and getting them to "participate in entrepreneurial-related activities" was launched.{{who|date=October 2013}}

== Definition  ==
The term "entrepreneur" is defined as an individual who organizes or operates a business or businesses. Credit for coining this term generally goes to the French economist [[Jean-Baptiste Say]]. However, the Irish-French economist [[Richard Cantillon]] defined the term first<ref>{{cite book|first=Anthony |last=Brewer|title=Richard Cantillon: Pioneer of Economic Theory|url={{google books |plainurl=y |id=2yD9NWJ8_mwC}}|year=1992|publisher=Routledge|isbn=978-0-415-07577-0}}</ref> in his ''Essai sur la Nature du Commerce en Général'', or ''Essay on the Nature of Trade in General'', a book [[William Stanley Jevons]] considered the "cradle of political economy".<ref>{{cite book|author=William Stanley Jevons|date=January 1881|title=Richard Cantillon and the Nationality of Political Economy|work=Contemporary Review|publisher=The Contemporary Review Company|pages=333–360}}</ref> Cantillon used the term differently; biographer Anthony Breer noted that Cantillon saw the entrepreneur as a risk-taker while Say considered the entrepreneur a "planner". Cantillon defined the term as a person who pays a certain price for a product and resells it at an uncertain price: "making decisions about obtaining and using the resources while consequently admitting the risk of enterprise." The word first appeared in the French dictionary entitled "Dictionnaire Universel de Commerce" compiled by Jacques des Bruslons and published in 1723.<ref>{{Cite journal|url=http://researchdirection.org/UploadArticle/48.pdf|first=Ashok Bhanudas |last=Navale, |title=Developing Entrepreneur Skills for Corporate Work|journal=Research Directions|date=October 2013|volume=1|issue=4|issn=2321-5488}}</ref>

===Relationship between small business and entrepreneurship===
The term "entrepreneur" is often conflated with the term "[[small business]]" or used interchangeably with this term. While most entrepreneurial ventures start out as a small business, not all small businesses are entrepreneurial in the strict sense of the term. Many small businesses are sole proprietor operations consisting solely of the owner, or they have a small number of employees, and many of these small businesses offer an existing product, process or service, and they do not aim at growth. In contrast, entrepreneurial ventures offer an innovative product, process or service, and the entrepreneur typically aims to scale up the company by adding employees, seeking international sales, and so on, a process which is financed by [[venture capital]] and [[angel investor|angel investment]]s. Successful entrepreneurs have the ability to lead a business in a positive direction by proper planning, to adapt to changing environments and understand their own strengths and weakness.<ref>{{cite  web|url=http://www.ondernemerstest.nl/wp-content/uploads/2010/03/ICSBv5.pdf|first1=Martyn P. |last1=Driessen |first2=Peter S. |last2=Zwart|title=The role of the entrepreneur in small business success: the  Entrepreneurship Scan|year= 2010 }}</ref>

=== Ethnic entrepreneurship ===
The term "ethnic entrepreneurship" refers to self-employed, business owners who belong to racial or [[ethnic minority]] groups in the United States and Europe. A long tradition of academic research explores the experiences and strategies of ethnic entrepreneurs as they strive to integrate economically into mainstream US or European society. Classic cases include Jewish merchants and tradespeople in large U.S. cities in the 19th and early 20th centuries as well as Chinese and Japanese small business owners (restaurants, farmers, shop clerks) on the West Coast.<ref>{{Cite web|title = Out Of Print : Ethnic Enterprise in America: Business and Welfare Among Chinese, Japanese, and Blacks : Ivan Light - University of California Press|url = http://www.ucpress.edu/op.php?isbn=9780520024854|website = www.ucpress.edu|access-date = 2016-01-16}}</ref>

In the 2010s, ethnic entrepreneurship has been studied in the case of Cuban business owners in Miami, Indian motel owners of the U.S. and Chinese business owners in [[Chinatown]]s across the United States. While entrepreneurship offers these groups many opportunities for economic advancement, self-employment, and business ownership in the United States remain unevenly distributed along racial/ethnic lines.<ref name="Chaudhary 318–354">{{Cite journal|title = Racialized Incorporation: The Effects of Race and Generational Status on Self-Employment and Industry-Sector Prestige in the United States|url = http://onlinelibrary.wiley.com/doi/10.1111/imre.12087/abstract|journal = International Migration Review|date = 2015-06-01|issn = 1747-7379|pages = 318–354|volume = 49|issue = 2|doi = 10.1111/imre.12087|first = Ali R.|last = Chaudhary}}</ref> Despite numerous success stories of Asian entrepreneurs, a recent statistical analysis of U.S. census data shows that whites are more likely than Asians, African-Americans, and Latinos to be self-employed in high prestige, lucrative industries.<ref name="Chaudhary 318–354"/>

=== Institutional entrepreneur ===

The USA-born British economist [[Edith Penrose]] has highlighted the collective nature of entrepreneurship. She mentions that in modern organizations, human resources need to be combined in order to better capture and create business opportunities.<ref>Penrose, Edith T. (1959). The Theory of the Growth of the Firm. New York: John Wiley.</ref>  The sociologist [[Paul DiMaggio]] (1988:14) has expanded this view to say that "new institutions arise when organized actors with sufficient resources [institutional entrepreneurs] see in them an opportunity to realize interests that they value highly".<ref>DiMaggio, P. 1988 'Interest and agency in institutional theory'. In Institutional patterns and culture, L. Zucker (ed.), Cambridge, MA: Ballinger Publishing Company: 3-22.</ref> The notion has been widely applied.<ref>{{cite journal | last1 = Levy | first1 = D. | last2 = Scully | first2 = M. | year = 2007 | title = The institutional entrepreneur as modern prince: The strategic face of power in contested fields | url = | journal = Organization Studies | volume = 28 | issue = 7| pages = 971–991 | doi=10.1177/0170840607078109}}</ref><ref>Khan, F., K. Munir, and H. Willmott 2007 'A Dark Side of Institutional Entrepreneurship: Soccer Balls, Child Labour and Postcolonial Impoverishment'. Organization Studies 28/7: 1055—1077.</ref><ref>Hardy, C., and S. Maguire: "Entrepreneurship" in Handbook of organizational institutionalism. R. Greenwood, C. Oliver, K. Sahlin-Andersson and R. Suddaby (eds).</ref><ref>Almeida, J., de Paula, N., Pessali, H. '[http://www.emeraldinsight.com/doi/full/10.1108/BFJ-02-2012-0028 Institutional entrepreneurship in building the Brazilian market of functional yogurts].' British Food Journal, vol. 116, p. 2-15, 2014.</ref>

=== Feminist entrepreneur ===
A [[feminist]] entrepreneur is an individual who applies feminist values and approaches through entrepreneurship, with the goal of improving the quality of life and wellbeing of girls and women.<ref>{{Cite book|url=http://www.sup.org/books/title/?id=22349|title=Feminine Capital: Unlocking the Power of Women Entrepreneurs|last=Orser|first=Barbara|last2=Elliott|first2=Catherine|date=2015-03-25|publisher=Stanford Business Books|year=|isbn=9780804783798|location=|pages=214|language=English|via=}}</ref> Many are doing so by creating ‘for women, by women’ enterprises.’ Feminist entrepreneurs are motivated to enter commercial markets by desire to create wealth and social change, based on the ethics of cooperation, equality, and mutual respect.<ref>{{Cite journal|last=Barbara J. Orser|last2=Catherine Elliott|last3=Joanne Leck|date=2011-11-08|title=Feminist attributes and entrepreneurial identity|url=http://www.emeraldinsight.com/doi/abs/10.1108/17542411111183884|journal=Gender in Management: an International Journal|volume=26|issue=8|pages=561–589|doi=10.1108/17542411111183884|issn=1754-2413}}</ref><ref>Orser, Barbara, and Joanne Leck. "Physician as feminist entrepreneur: The gendered nature of venture creation and the Shirley E. Greenberg Women’s Health Centre." Women entrepreneurs and the global environment for growth (2010): 284-302.</ref>

==Entrepreneurial behaviors ==
[[File:Karren Brady -Wolverhampton -14March2008.jpg|thumb|right|British entrepreneur [[Karren Brady]] has an estimated net worth of $123 million<ref>{{cite web|url=http://www.celebritynetworth.com/richest-celebrities/karren-brady-net-worth/|title=Karren Brady Net Worth|date=10 January 2014|publisher=}}</ref>]]

The entrepreneur is commonly seen as an innovator — a designer of new ideas and business processes.<ref>[http://www.investopedia.com/terms/e/entrepreneur.asp ''Investopedia'']; Investopedia.com; access date.</ref>  Management skills and strong team building abilities are often perceived as essential leadership attributes for successful entrepreneurs.<ref name="Forbes">{{cite news | url=https://www.forbes.com/sites/tanyaprive/2012/12/19/top-10-qualities-that-make-a-great-leader | title=Top 10 Qualities That Make A Great Leader | first=Tanya | last=Prive | work=[[Forbes]] | date=19 December 2012 | accessdate=1 August 2013}}</ref> Political economist [[Robert Reich]] considers leadership, management ability, and [[team-building]] to be essential qualities of an entrepreneur.<ref>{{cite book | first=Richard | last=Cantillon | title=Essai sur la Nature du Commerce en Général | year=1755}}</ref><ref>{{cite book | first=Peter F. | last=Drucker | title=Innovation and Entrepreneurship | year=1985}} attributes the coining and defining of "entrepreneur" to Jean-Baptiste Say in his ''A Treatise on Political Economy''; (1834).</ref>

=== Uncertainty perception and risk-taking ===
[[File:Computer industry entrepreneur workshop.jpg|thumb|[[Dell]] Women's Entrepreneur [[Business networking|Network]] event in New York City]]
Theorists [[Frank Knight]]<ref>{{cite book |first=Frank Hyneman |last=Knight |authorlink=Frank H. Knight |title=Risk, Uncertainty and Profit|url={{google books |plainurl=y |id=-alYLsfnCXUC}}|year=2005|publisher=Cosimo, Inc.|isbn=978-1-59605-242-0}}</ref> and [[Peter Drucker]] defined entrepreneurship in terms of risk-taking. The entrepreneur is willing to put his or her career and financial security on the line and take risks in the name of an idea, spending time as well as capital on an uncertain venture. However, entrepreneurs often do not believe that they have taken an enormous amount of risks because they do not perceive the level of uncertainty to be as high as other people do. Knight classified three types of uncertainty:

* [[Risk]], which is measurable statistically (such as the probability of drawing a red color ball from a jar containing 5 red balls and 5 white balls)
* [[Ambiguity]], which is hard to measure statistically (such as the probability of drawing a red ball from a jar containing 5 red balls but an unknown number of white balls)
* [[Uncertainty|True uncertainty]] or Knightian uncertainty, which is impossible to estimate or predict statistically (such as the probability of drawing a red ball from a jar whose contents are entirely unknown)
[[File:Malala Yousafzai 2015.jpg|thumb|[[Malala Yousafzai]], a Pakistani activist, social entrepreneur, and the youngest-ever [[Nobel Peace Prize]] winner, was named in the [[Forbes|''Forbes'' 30]] list]]
Entrepreneurship is often associated with true uncertainty, particularly when it involves the creation of a novel good or service, for a market that did not previously exist, rather than when a venture creates an incremental improvement to an existing product or service.  A 2014 study at ETH Zürich found that compared with typical managers, entrepreneurs showed higher decision-making efficiency, and a stronger activation in regions of frontopolar cortex (FPC) previously associated with explorative choice.<ref>{{cite journal|last1=Laureiro-Martínez|first1=Daniella|last2=Canessa|first2=Nicola|last3=Brusoni|first3=Stefano|last4=Zollo|first4=Maurizio|last5=Hare|first5=Todd|last6=Alemanno|first6=Federica|last7=Cappa|first7=Stefano F.|title=Frontopolar cortex and decision-making efficiency: comparing brain activity of experts with different professional background during an exploration-exploitation task|journal=Frontiers in Human Neuroscience|date=22 January 2014|volume=7|page=927|doi=10.3389/fnhum.2013.00927|url=http://journal.frontiersin.org/article/10.3389/fnhum.2013.00927/full}}</ref>

=== "Coachability" and advice taking ===
The ability of entrepreneurs to work closely with and take advice from early investors and other partners (i.e., their ''coachability'') has long been considered a critical factor in entrepreneurial success.<ref>{{Cite journal|last=Timmons|first=Jeffry A.|last2=Bygrave|first2=William D.|title=Venture capital's role in financing innovation for economic growth|url=https://doi.org/10.1016/0883-9026(86)90012-1|journal=Journal of Business Venturing|volume=1|issue=2|pages=161–176|doi=10.1016/0883-9026(86)90012-1|year=1986}}</ref> At the same time, economists have argued that entrepreneurs should not simply act on all advice given to them, even when that advice comes from well-informed sources, because entrepreneurs possess far deeper and richer local knowledge about their own firm than any outsider. Indeed, measures of coachability are ''not'' actually predictive of entrepreneurial success (e.g., measured as success in subsequent funding rounds, acquisitions, pivots, and firm survival). This research also shows that older and larger founding teams, presumably those with more subject expertise, are less coachable than younger and smaller founding teams.

===Strategies===
Strategies that entrepreneurs may use include:
   
* [[Innovation]]<ref name=":1">{{Cite web|url=|title=Decoding Right Strategies for Entrepreneurship|last=|first=|date=|publisher=|access-date=2016-03-30}}</ref> of new products, services or processes
* Continuous process improvement (CPI)<ref name=":1" />
* Exploration
* Use of technology<ref name=":1" />
* Use of [[business intelligence]]
* Use of economical strategics
* Development of future products and services<ref name=":1" />
* Optimized talent management<ref name=":1" />

=== Designing individual/opportunity nexus ===
According to Shane and Venkataraman, entrepreneurship comprises both "enterprising individuals" and "entrepreneurial opportunities", and researchers should study the nature of the individuals who identify opportunities when others do not, the opportunities themselves and the nexus between individuals and opportunities.<ref>{{cite journal | doi = 10.5465/AMR.2000.2791611 | title=THE PROMISE OF ENTREPRENEURSHIP AS A FIELD OF RESEARCH. | journal=Academy of Management Review | date=2000 | volume=25 | issue=1 | pages=217–226 | first=S. | last=Shane}}</ref> On the other hand, Reynolds et al.<ref>Reynolds PD, Hay M, Bygrave WD et al. (2002) Global Entrepreneurship Monitor: 2002 Global Executive Report. Kansas City, MO: Kauffman Foundation.</ref> argue that individuals are motivated to
engage in entrepreneurial endeavors driven mainly by necessity or opportunity, that is, individuals pursue entrepreneurship primarily owing to survival needs, or because, they identify business opportunities that satisfy their need for achievement. For example, higher economic inequality tends to increase entrepreneurship rates at the individual level. However, most of it is often based on necessity rather than opportunity.<ref>Xavier-Oliveira et al. (1 July 2015). ''[http://hum.sagepub.com/content/68/7/1183.abstract What motivates entrepreneurial entry under economic inequality? The role of human and financial capital].'' Human Relations 68(7): 1183-1207, Sage.</ref>

=== Opportunity perception and biases===
The ability of entrepreneurs to [[Innovation|innovate]] relates to innate traits, including [[extroversion]] and a proclivity for [[risk-taking]].<ref>{{cite web|title=Why risk-taking is Important as an Entrepreneur|author=Mike Smith|url=http://www.bestbusinessbooks.store/entrepreneurship-business-blog/why-risk-taking-is-important-as-an-entrepreneur |publisher=Best Business Books Blog |accessdate=22 Aug 2017}}</ref>  According to [[Joseph Schumpeter]], the capabilities of innovating, introducing new technologies, increasing efficiency and productivity, or generating new products or services, are characteristic qualities of entrepreneurs.<ref name="Dailybsness.com">{{cite web |url=http://www.dailybsness.com/en-wiki/The_basic_characteristics_of_a_successful_entrepreneur |title=The basic characteristics of a successful entrepreneur}}</ref> One study has found that certain genes affecting personality may influence the income of self-employed people.<ref>{{cite journal | last1=Shane | first1=S. | last2=Nicolaou | first2=N. | year=2013 | title=The genetics of entrepreneurial performance | journal=International Small Business Journal | volume=31 | issue=5 | pages=473–495 | doi=10.1177/0266242613485767}}</ref> Some people may be able to use {{weasel inline|date=February 2015}} "an innate ability" or [[Spiral of silence#Quasi-statistical sense|quasi-statistical sense]] to gauge [[public opinion]]<ref name= "Miller 2005:278">{{Harvard citation no brackets| Miller | 2005 | p = 278}}.</ref> and market demand for new products or services. Entrepreneurs tend to have the ability to see unmet market needs and underserved markets. While some entrepreneurs assume they can sense and figure out what others are thinking, the [[mass media]] plays a crucial role in shaping views and demand.<ref name="Scheufele and Moy 1999">{{Harvnb | Scheufele | Moy | 1999}}{{page needed | date = October 2013}}.</ref> Ramoglou argues that entrepreneurs are not that distinctive and that it is essentially poor conceptualizations of "non-entrepreneurs" that maintain laudatory portraits of "entrepreneurs" as exceptional innovators or leaders <ref>{{cite journal | last1=Ramoglou | first1=S. | year=2013 | url=http://isb.sagepub.com/content/early/2011/12/04/0266242611425838.abstract | title=Who is a 'non-entrepreneur'? Taking the 'others' of entrepreneurship seriously | journal=International Small Business Journal | volume=31 | issue=4 | pages=432–453 | doi=10.1177/0266242611425838}}</ref><ref>{{cite journal|last1=Gartner |first1=William B. |year=2001 |url=http://pcbfaculty.ou.edu/classfiles/Mgt%206973_Entrepreneurship%20Seminar%20Fall%202011/Wk%202_Theory%20&%20Entrepreneur/Gartner%202001%20ETP_Elephants.pdf |archive-url=http://webarchive.nationalarchives.gov.uk/20120809053422/http://pcbfaculty.ou.edu/classfiles/Mgt%206973_Entrepreneurship%20Seminar%20Fall%202011/Wk%202_Theory%20%26%20Entrepreneur/Gartner%202001%20ETP_Elephants.pdf |dead-url=yes |archive-date=2012-08-09 |title=Is There an Elephant in Entrepreneurship? Blind Assumptions in Theory Development; Business research |journal=Entrepreneurship Theory and Practice |volume=25 |issue=4 |pages=27–39 }}</ref> Entrepreneurs are often overconfident, exhibit illusion of control, when they are opening/expanding business or new products/services.<ref name="onlinelibrary.wiley.com"/>

=== Styles===
Differences in entrepreneurial organizations often partially reflect their founders' [[heterogenous]] identities. Fauchart and Gruber have classified entrepreneurs into three main types: ''[[Charles Darwin|Darwinians]]'', ''[[Communitarianism|Communitarians]],'' and ''[[Missionary|Missionaries]]''. These types of entrepreneurs diverge in fundamental ways in their self-views, social motivations, and patterns of new firm creation.<ref>{{cite journal | last1=Fauchart | first1=E | last2=Gruber | first2=M. | year=2011 | title=Darwinians, Communitarians, and Missionaries: The Role of Founder Identify in Entrepreneurship | journal=Academy of Management Journal | volume=54 | issue=5 | pages=935–957 | doi=10.5465/amj.2009.0211}}</ref>

===Communication===
Entrepreneurs need to practice effective [[communication]] both within their firm and with external partners and investors, in order to launch and growth a venture and enable it to survive. An entrepreneur needs a communication system that links the staff of her firm and connects the firm to outside firms and clients. Entrepreneurs should be [[charismatic leader]]s, so they can communicate a [[vision statement|vision]] effectively to their team and help to [[team building|create a strong team]].  Communicating a vision to followers may be well the most important act of the transformational leader.<ref>{{cite book|last=Hackman|first=M.Z.|title=Leadership: A communication perspective|year=2009|publisher=Waveland|location=Long Grove, IL|edition=5th|author2=Johnson, C.E.}}</ref> Compelling  visions provide employees with a sense of purpose and encourage commitment. According to Baum et al.<ref name="Baum et al.">{{cite journal|last=Baum|first=Robert J.|author2=Locke, Edwin A. |author3=Kirkpatrick, Shelley A. |title=A longitudinal study of the relation of vision and vision communication to venture growth in entrepreneurial firms.|journal=Journal of Applied Psychology|year=1998|volume=83|issue=1|pages=43–54|doi=10.1037/0021-9010.83.1.43}}</ref> Kouzes and Posner,<ref name=Kouzes>{{cite book|last=Kouzes|first=J.M|title=The leadership challenge: How to get extraordinary things done in organizations|year=1987|publisher=Jossey-Bass|location=San Francisco|author2=Posner, B.Z.}}</ref> the vision must be communicated through written statements and through in-person communication. Entrepreneurial leaders must speak and listen to effectively articulate their vision to others.<ref name="Locke et al.">{{cite book|last=Locke|first=E.A.|title=The essence of leadership|year=1991|publisher=Lexington Books|location=New York|author2=Kirkpatrick, S. |author3=Wheeler , J.K |author4=Schneider, J |author5=Niles, K. |author6=Goldstein, H |author7=Welsh, K |author8=Chah, D.O. }}</ref>

Communication is pivotal in the role of entrepreneurship, because it enables leaders to convince potential investors, partners and employees about the feasibility of a venture.<ref>{{cite journal|last=Clarke|first=J.|author2=Cornelissen, J|title=Language, communication, and socially situated cognition in entrepreneurship. Academy Of Management Review|journal=Academy of Management Review|year=2011|volume=36|issue=4|pages=776–778|doi=10.5465/AMR.2011.65554783}}</ref> Entrepreneurs need to communicate effectively to shareholders.<ref>{{cite journal|last=Euler|first=M|author2=Vollmar, B. H. |author3=Kraus, S. |title=Communication matters--Network constellations in entrepreneurship.|journal=International Journal of Economics and Business Research|year=2011|volume=3|issue=3|pages=283–301|doi=10.1504/ijebr.2011.040021}}</ref> [[Nonverbal]] elements in speech such as the tone of voice, the look in the sender's eyes, body language, hand gestures, and state of emotions are also important communication tools. The [[Communication Accommodation Theory]] posits that throughout communication, people will attempt to accommodate or adjust their method of speaking to others.<ref>{{cite book|last=Giles|first=H|title=Language, social comparison and power. The handbook of communication science|year=1987|pages=350–384|author2=Wiemann, J.M}}</ref>  [[Face Negotiation Theory]] describes how people from different cultures manage conflict negotiation in order to maintain "[[face (sociological concept)|face]]".<ref name="Ting Toomey">{{cite book|last=Ting-Toomey|first=S|title=Toward a theory of conflict and culture in communication. Culture & Organizational processes|year=1985|pages=71–86}}</ref> Hugh Rank's "intensify and downplay" communications model can be used by entrepreneurs who are developing a new product or service. Rank argues that entrepreneurs need to be able to intensify the advantages of their new product or service and downplay the disadvantages, in order to persuade others to support their venture.<ref>{{cite book|last=Rank|first=H|title=Teaching about public persuasion|year=1976|publisher=National Council of Teachers of English}}</ref>

==== Links to sea piracy ====
Research from 2014 found links between entrepreneurship and historical sea [[piracy]]. In this context, the claim is made for a non-moral approach to looking at the history of piracy as a source of inspiration for entrepreneurship education<ref>Lawrence, D. (2014) Disruptors are just pirates on the high seas of capitalism. ''The Globe and Mail Special on Business Education'', 5 November 2014. Available at https://www.theglobeandmail.com/report-on-business/careers/business-education/disruptors-are-just-pirates-on-the-high-seas-of-capitalism/article21443149/</ref> as well as for research in entrepreneurship<ref>{{cite journal | last1 = Roth | first1 = S | year = 2014 | title = Booties, bounties, business models: a map to the next red oceans | url = http://works.bepress.com/roth/9/ | journal = International Journal of Entrepreneurship and Small Business | volume = 22 | issue = 4| pages = 439–448 | doi=10.1504/ijesb.2014.064272}}</ref> and business model generation.<ref>{{cite journal | last1 = Roth | first1 = S | year = 2014 | title = The eye-patch of the beholder | url = http://works.bepress.com/roth/8/ | journal = International Journal of Entrepreneurship and Small Business | volume = 22 | issue = 4| pages = 399–407 | doi=10.1504/ijesb.2014.064271}}</ref>

== Psychological makeup ==
[[File:Steve Jobs Headshot 2010-CROP.jpg|thumb|200px|Apple co-founder and longtime leader [[Steve Jobs]] (pictured in 2010) led the introduction of many innovations in the computer, [[smartphone]] and digital music industry.]]
[[Stanford University]] economist [[Edward Lazear]] found in a 2005 study that variety in education and work experience was the most important trait that distinguished entrepreneurs from non-entrepreneurs<ref>{{cite journal|last = Lazear |first = Edward | title = Entrepreneurship | publisher = Journal of Labor Economics |volume = 23| issue =  4 | date = 2005 | accessdate = 24 February 2015 |url=http://www2.econ.iastate.edu/classes/econ521/orazem/Papers/Lazear_entrepreneurship.pdf }}</ref> A 2013 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.<ref>{{cite journal|last1=Backes-Ge1llner |first=Uschi |last2=Moog |first2 =Petra |title=The disposition to become an entrepreneur and the jacks-of-all-trades in social and human capital | publisher = The Journal of Socio-Economics |volume=47 |date=December 2013 |pages = 55–72 | url=http://www.sciencedirect.com/science/article/pii/S1053535713001236 | accessdate= 24 February 2015 | doi=10.1016/j.socec.2013.08.008 | journal=The Journal of Socio-Economics}}</ref><ref>{{cite web|last=Baer  |first=Drake |date= 19 February 2015 |accessdate= 25 February 2015|url=http://www.businessinsider.com/personality-difference-between-entrepreneurs-and-employees-2015-2#ixzz3SklQUxLd-2 |title=Scientists have discovered a personality difference between entrepreneurs and employees}}</ref>

Studies show that the psychological propensities for male and [[female entrepreneur]]s are more similar than different. [[Empirical studies]] suggest that female entrepreneurs possess strong negotiating skills and consensus-forming abilities.<ref name="Entrepreneurship"/> Asa Hansson, who looked at empirical evidence from Sweden, found that the probability of becoming self-employed decreases with age for women, but increases with age for men.<ref name=":0">{{Cite journal|last=Hanssan|first=Asa|date=2012|title=Tax policy and entrepreneurship: empirical evidence from Sweden|url=|journal=Small Business Economics|doi=|pmid=|access-date=}}</ref> She also found that marriage increased the probability of a person becoming an entrepreneur.<ref name=":0" />

Jesper Sørensen wrote that significant influences on the decision to become an entrepreneur are workplace peers and social composition. Sørensen discovered a correlation between working with former entrepreneurs and how often these individuals become entrepreneurs themselves, compared to those who did not work with entrepreneurs.<ref name="Sorensen">{{cite journal | last1=Sørensen | first1=J. | last2=Nanda | first2=R. | url=http://www.edegan.com/pdfs/Nanda%20Sorensen%20(2010)%20-%20Workplace%20peers%20and%20entrepreneurship.pdf | title=Workplace Peers and Entrepreneurship | journal=Management Science | volume=56 | issue=7 | pages=1116–1126 | date=July 2010 | accessdate=30 June 2013 | doi = 10.1287/mnsc.1100.1179 }}</ref> Social composition can influence entrepreneurialism in peers by demonstrating the possibility for success, stimulating a "He can do it, why can't I?" attitude. As Sørensen stated, "When you meet others who have gone out on their own, it doesn't seem that crazy."<ref name="sorensen_interview">{{cite news | url=http://www.gsb.stanford.edu/news/research/sorensen_peers.html | title=Peers Influence Decision to Become an Entrepreneur | publisher=Stanford Graduate School of Business; News | date=1 September 2009 | accessdate=30 June 2013}}</ref>

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<ref name=":0" /> 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. He 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. A person's response is triggered by his/her personality and the situation that is faced.<ref>[[Entrepreneurship#http://www.nyenrode.com/FacultyResearch/research/Documents/Research Paper Series/2007/07-04.pdf?AspxAutoDetectCookieSupport=1|ENTREPRENEURIAL BEHAVIOR]], Retrieved 17 December 2014.</ref>

[[File:Abugabal PressConference 2.jpg|thumb|Founder and oncologist [[Yehia Abugabal]] during Press Conference of the [[World Government Summit]], one of the ''Forbes'' 30, a healthcare entrepreneur and a leading international [[advocate]] for the rights of [[youth]] and their inclusion]]
Innovative entrepreneurs may be more likely to experience what psychologist [[Mihaly Csikszentmihalyi]] calls ''[[flow (psychology)|flow]]''. "Flow" occurs when an individual forgets about the outside world due to being thoroughly engaged in a process or activity. Csikszentmihalyi suggested that breakthrough innovations tend to occur at the hands of individuals ''in that state''.<ref>{{cite book|first=Mihaly |last=Csikszentmihalyi|title=Flow|url={{google books |plainurl=y |id=epmhVuaaoK0C}}|date=13 October 2009|publisher=HarperCollins|isbn=978-0-06-187672-1}}</ref> Other research has concluded that a strong internal motivation is a vital ingredient for breakthrough innovation.<ref name="ChristensenJohnson2008">{{cite book|first1=Clayton |last1=Christensen|first2=Curtis W. |last2=Johnson|first3=Michael B. |last3=Horn|title=Disrupting Class: How Disruptive Innovation Will Change the Way the World Learns|url={{google books |plainurl=y |id=wiBcUl44FEcC}}|date=14 May 2008|publisher=McGraw Hill Professional|isbn=978-0-07-164174-6}}</ref> Flow can be compared to [[Maria Montessori]]'s concept of normalization, a state that includes a child's capacity for joyful and lengthy periods of intense concentration.<ref>{{cite book|last=Montessori|first=Maria|title=The Absorbent Mind|year=1967|publisher=Holt, Rinehart and Winston|location=New York}}</ref> Csikszentmihalyi acknowledged that Montessori's ''prepared environment'' offers children opportunities to achieve flow.<ref>{{cite journal|last=Rathunde|first=Kevin|first2=Mihaly |last2=Csikszentmihalyi|title=Middle School Students' Motivation and Quality of Experience: A Comparison of Montessori and Traditional School Environments|journal=American Journal of Education|date=May 2005|volume=111|issue=3|pages=341–371|doi=10.1086/428885}}</ref> Thus quality and type of early education may influence entrepreneurial capability.

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.<ref>{{cite journal | last1 = Conchie | first1 = S. M. | last2 = Donald | first2 = I. J. | year = 2007 | title = The functions and development of safety-specific trust and distrust | url = | journal = Safety Science | volume = 46 | issue = 1| pages = 92–103 | doi=10.1016/j.ssci.2007.03.004}}</ref> When non-routine strategies are needed, distrusting persons perform better, while when routine strategies are needed trusting persons perform better. This research was extended to entrepreneurial firms by Gudmundsson and Lechner.<ref>{{cite journal | last1 = Gudmundsson | first1 = S.V. | last2 = Lechner | first2 = C. | year = 2013 | title = Cognitive Biases, Organization, and Entrepreneurial Firm Survival | url = | journal = European Management Journal | volume = 31 | issue = 3| pages = 278–294 | doi=10.1016/j.emj.2013.01.001}}</ref> They argued that in entrepreneurial firms the threat of failure is ever present resembling non-routine situations in high-risk settings. 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.<ref>{{cite journal | last1 = Kets de Vries | first1 = M. | year = 2003 | title = The entrepreneur on the couch | url = | journal = INSEAD Quarterly | volume = 5 | issue = | pages = 17–19 }}</ref> He concluded that distrusting entrepreneurs are less likely to discount negative events, and are more likely to engage control mechanisms. 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 2012 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.<ref>{{cite journal|last1=Schoon|first1=Ingrid|last2=Duckworth|first2=Kathryn|title=Who becomes an entrepreneur? Early life experiences as predictors of entrepreneurship.|journal=Developmental Psychology|date=2012|volume=48|issue=6|pages=1719–1726|doi=10.1037/a0029168}}</ref>

==Leadership in entrepreneurship==
{{Tone|section|date=October 2017}}

[[Leadership]] and [[communication]] are constantly growing together, being intertwined into one another to help develop an organization. To be an effective [[leader]], communication has to be defined in the organization for it to be successful. Gary Yukl defines leadership as, "the process of influencing others to understand and agree about what needs to be done and how to do it, and the process of facilitating individual and collective efforts to accomplish shared objectives".<ref name="HackmanJohnson">Hackman, M. Z., & Johnson, C. E. (2009). ''Leadership: A communication perspective'' (5th ed.)</ref> To accomplish shared objectives, communication has to be a transactional process that allows for a constant cycle of information to be sent from source/receiver and vice versa. As leaders continue to send and receive information, building relationships with the followers allows for a bond to be made. Through the bond being made it allows for the followers to share their values, and thoughts for example; this gives them a sense of affiliation because the leader is being concerned about his/her employees. Once an organization is able to define leadership and communication, it can begin to advance to the structure of the organization.

[[Johann Wolfgang von Goethe]] says, "Treat people as they were that they ought to be and you may help them to become what they are capable of being". As a leader, there are two qualities that you need to focus on in an organization: the structure of the organization and how followers are involved. The type of leadership you want in an organization would be a democratic approach. A democratic leader does not feel threatened when followers make suggestions, but instead accepts the contributions to help improve the overall quality of decision-making.<ref name="HackmanJohnson"/> Having a democratic system allows for the followers to set goals for the organization, and this creates two-way communication that openly flows between the leader and followers. The leader wants to have more interaction with the followers. Through interaction it allows followers to be engaged in the organization, but they also have a higher participation rate. The democratic style of leadership communication is often most effective. Generally, the benefits derived from democratic communication far outweigh any potential cost.<ref name="HackmanJohnson"/>

===Successful styles to help democratic leadership===
{{Tone|date=October 2017}}

For an organization to be focused on a democratic leadership style, traits, functions and relationships have to be obtained. Before you can classify someone to leadership position, certain qualities have to follow. The common assumptions of leaders are: leaders are born; however, this is not the case. Leaders are developed through different types of training and experience. Through the training and experience, the leader gains different traits to help make the organization functional. Leaders need to be interpersonal, cognitive, and motivational. An interpersonal leader allows for relationships to be built and to communicate messages to their followers. Cognitive leaders are able to problem solve more effective because of their intellectual ability to process information and come up with creative ideas to help eliminate the problem in the organization. Finally, having motivational leaders gets the organization excited about new tasks and this allows for positive productions to occur. Motivation has been associated with ratings of leadership potential, career achievement, and promotion.<ref name="HackmanJohnson"/> The three traits will help a leader become successful because others will look up to them, and create a positive organization to work in.

Taking on the functional approach of leadership, leaders have to think about responsibilities that are taken out in the organization. The functional approach looks at the communication behavior of the leaders. Through functional leadership, roles have to be taken for the organization to function properly. The roles help give followers classifications, so they have an idea of what is expected of them. Roles in the functional approach are task related, group building and maintenance, and individual. These roles allow for tasks to be accomplished and also to build up the organization through [[positive reinforcement]], but also take away conflict that occurs. The task related role gives followers a sense of direction for an assignment to be completed in the group. Group building and maintenance roles steer the organization for open, supportive and healthy relationships with other followers in the organization. This role also helps to eliminate tension between workers and allows for sides to be heard on different topics that arise. However, in an organization the "me" wants to come out and this creates the individual role in the organization. Even though taking on an individual role can be healthy for the self because it creates autonomy, it also can be detrimental to the organization because it reduces the amount of group effectiveness. Being a functional leader allows for the organization to run like a machine and having all the parts work together to accomplish a common goal.

While in an organization, it is important to focus on traits and functionalities of leaders from within, it is also key to focus on the relational side of leadership. Being relational with leaders/followers allows for relationships to be built. While looking at the two different models ([[vertical dyad linkage theory]] and [[leader–member exchange theory]]), different perspectives from each side are gained. For an organization to be democratic, the LMX theory supports the claims of it. The influence of VDL model helped get LMX theory to where it is today. Usually the assumption is leaders can only build close relations with trusted assistants due to lack of time and resources. Leaders developing relations usually results in partnerships with certain followers, but leaders have the responsibility to make relations and offer partnerships to all of the followers (Hackman & Johnson, 2009, pg. 94). Making partnerships with all of the followers will increase the performance of the organization as a whole. Once this relation is built a relation trust is built and more information is able to be revealed to the organization leader.

[[Pittacus]] said, "The measure of a human is what he/she does with power." As an organization is developed, power has to be expressed to be able to hold the structure of the organization together and has the ability to influence others. As influence takes over, tasks will be accomplished in the organization. The types of power that are expressed will determine the type of leadership styles, traits, function, and relations used. Since there has been the description of democratic leadership throughout, there are two types of power that would fit with democratic leadership: reward and referent. Reward power gives followers something to work for and accomplish in the organization. To get followers to work for the reward it needs to have some attractive desires. The desire will create motivation in the followers to work harder to obtain the reward. Using the reward will create discussion in the organization and the positive feedback will have followers work harder. This allows for efficiency and time management to be used because the followers want to be the best of the best. The second type of power that could be used is referent power. This is having someone followers look up to that has the ability to influence their behavior. The use of referent power has a high follower task satisfaction and task performance <ref name="HackmanJohnson"/> Using referent power shows trust is built with the leader because the leader is relational with the followers. Once leaders build trust followers will help in any way. This power can be related to relational leadership because of the idea of relationships being built in the organization. As a close relationship is built with followers, more information is exchanged in a two-way flow and it creates an established organization.

===Entrepreneurship===
Entrepreneurship is the act of being an [[entrepreneur]], or "an owner or manager of a business enterprise who makes money through risk and initiative.".<ref>http://dictionary.reference.com/browse/entrepreneur</ref> Early 19th century French economist J.B. Say provided a broad definition of entrepreneurship, saying that it "shifts economic resources out of an area of lower and into an area of higher productivity and greater yield." Entrepreneurs create something new, something different; they change or transmute values.<ref>Drucker, P. F. (1993). ''Innovation and entrepreneurship: practice and principles''. New York: HarperBusiness.</ref> Regardless of the firm size, big or small, they can partake in entrepreneurship opportunities.

The opportunity to be an entrepreneur arises with the fulfillment of four criteria. First, there must exist opportunities or situations in which people believe that they can use new means-ends frameworks to recombine resources to generate profit. Second, entrepreneurship requires differences between people. Specifically, the preferential access to or ability to recognize information about opportunities. Third, risk bearing is a necessary part of the entrepreneurial process. Fourth, the entrepreneurial process requires the organization of people and resources.<ref name="Shane">Shane, S. A. (2003). ''A general theory of entrepreneurship: the individual-opportunity nexus''. Northampton, Massachusetts: E. Elgar.</ref>

"The entrepreneur is a factor in microeconomics, and the study of entrepreneurship reaches back to the work of Richard Cantillon and Adam Smith in the late 17th and early 18th centuries, but was largely ignored theoretically until the late 19th and early 20th centuries and empirically until a profound resurgence in business and economics in the last 40 years. In the 20th century, the understanding of entrepreneurship owes much to the work of economist [[Joseph Schumpeter]] in the 1930s and other Austrian economists such as [[Carl Menger]], [[Ludwig von Mises]] and [[Friedrich von Hayek]]. According to Schumpeter, an entrepreneur is a person who is willing and able to convert a new idea or invention into a successful innovation. Entrepreneurship employs what Schumpeter called "the gale of creative destruction" to replace in whole or in part inferior innovations across markets and industries, simultaneously creating new products including new business models. In this way, creative destruction is largely responsible for the dynamism of industries and long-run economic growth. The supposition that entrepreneurship leads to economic growth is an interpretation of the residual in endogenous growth theory and as such is hotly debated in academic economics. An alternate description posited by Israel Kirzner suggests that the majority of innovations may be much more incremental improvements such as the replacement of paper with plastic in the construction of a drinking straw.

One of the most famous entrepreneurs, [[Wayne Huizenga]] owned and operated many companies. He grew Blockbuster Video, Waste Management, Inc., and AutoNation into successful companies. He is also the former owner of the National Football League's Miami Dolphins, the National Hockey League's Florida Panthers and the Major League Baseball's Miami Marlins.

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".<ref name="Hitt, M. A. 2011">Hitt, M. A., Ireland, R., Sirmon, D. G., & Trahms, C. A. (2011). ''Strategic Entrepreneurship: Creating Value for Individuals, Organizations, and Society''. Academy of Management Perspectives, 25(2), 57-75. {{doi|10.5465/AMP.2011.61020802}}</ref>

A 2011 article for the Academy of Management provided a three-step, "Input-Process-Output" model of strategic entrepreneurship. 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. Through the proper use of strategic management/leadership techniques and the implementation of risk-bearing entrepreneurial thinking, the strategic entrepreneur is therefore able to align resources to create value and wealth.<ref name="Hitt, M. A. 2011"/>

===Leadership in entrepreneurship===
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"<ref>{{cite book|last=Chemers|first=M.|title=An integrative theory of leadership.|publisher=Lawrence Erlbaum Associates, Publishers|isbn=978-0-8058-2679-1}}</ref> in "one who undertakes innovations, finance and business acumen in an effort to transform innovations into economic goods".<ref name="Shane"/> This refers to not only the act of entrepreneurship as managing or starting a business, but how one manages to do so by these social processes, or leadership skills. 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.<ref name="ReferenceA">Hitt, M. A., Ireland, R. D., Hoskisson, R. E.. (2011). ''Strategic Management''. (9th ed.). Mason, Ohio: South-Western Cengage Learning.</ref> An entrepreneur typically has a mindset that seeks out potential opportunities during uncertain times.<ref name="ReferenceA" /> This leads us to see that an entrepreneur must have leadership skills or qualities in order to see potential opportunities and act upon them. An entrepreneur, at the core, is a decision maker. Such decisions often affect an organization as a whole, which is representative of their leadership amongst the organization.

According to Fisher (1970), there are four phases of decision-making: orientation, conflict, emergence, and reinforcement.<ref>{{cite journal | last1 = Fisher | first1 = B. A. | year = 1970 | title = Decision Emergence: Phases in Group Making | url = | journal = Communication Monographs | volume = 37 | issue = | pages = 53–66 }}</ref> As a communicative approach, the orientation stage is where the members involved are becoming acquainted both with themselves as well as the problem at hand. The conflict stage is where the problem is analyzed with several possibilities presented to resolve the problem. Upon discussing these possibilities, the emergence phase becomes known when a decision is made about which solution is to be used. The reinforcement stage is the supportive of the decision.<ref>Miller, K. (2009). ''Organizational Communication Approaches and Processes'', 8, 146-149.</ref> These phases are not without objection from many theorists in the field. Morley and Stephenson (1977) claim that such a staged model of decision-making is not so rigid between phases and varies depending upon the types of decisions made.<ref>Morley, I. E. & Stephenson, G. M. (1977). ''The Social Psychology of Bargaining''. London: Allen & Unwin.</ref>

With the growing global market and increasing technologies throughout all industries, the core of entrepreneurship, 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"<ref>Heaton, L. H. (2008) Knowledge Management. ''International Encyclopedia of Communication.'' Boston: Blackledge.</ref> This belief draws upon a leader's past experiences that may prove useful. 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.

===Global leadership and entrepreneurship===
It is important to note that the majority of scholarly research done on these topics have been from North America.<ref>Boyacigiller, N. & Adler, N. J. (1991). The Parochial Dinosaur: The Organizational Sciences in Global Context. ''Academy of Management Review.''</ref> Words like "leadership" and "entrepreneurship" do not always translate well into other cultures and languages. 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 Adolph Hitler. Other cultures, like some Europeans, view the term "leader" negatively, like the French.<ref>Grauman, C. F. (1986). ''Changing Conceptions of Leadership.''</ref> The participative leadership style that is encouraged in the United States is considered disrespectful in many other parts of the world due to the differences in power distance.<ref>Hofestede, G. (1991). ''Cultures and Organizations: Software of the Mind.''</ref> Many Asian and Middle Eastern countries do not have "open door" policies and would never informally approach their managers/bosses. For countries like that, an authoritarian approach to management and leadership works best, as is custom.

Despite cultural differences, the successes and failures of entrepreneurs can be traced to how leaders adapt to local conditions.<ref>Hofstede, G. (1980). Motivation, Leadership and Organization: Do American Theories Apply Abroad? ''Organizational Dynamics.''</ref> With the increasingly global environment, a successful leader must be able to make these adaptations and have some insight into other cultures. Corporate visions, in response to the environment, are becoming transnational in nature due to the changes an organization must make in order to operate or provide services/goods for other cultures <ref>Adler, N. J. % Gundersen, A. (2008). ''International Dimensions of Organizational Behavior''.</ref>

== Educational effects ==
Michelacci and Schivardi<ref>{{Cite journal|url = http://www.sciencespo.fr/liepp/sites/sciencespo.fr.liepp/files/paper_Are_They_All_Like_Bill_Michelacci.pdf|title = Are They All Like Bill, Mark, and Steve? The Education Premium for Entrepreneurs|last = Michelacci|first = Claudio|date = 24 June 2015|journal = EIEF|doi = |pmid = |access-date = 27 November 2015}}</ref> 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 degree 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. 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 [[Opportunity cost|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.

== Project entrepreneurship ==
Project entrepreneurs are individuals who are engaged in the repeated assembly or creation of temporary organizations.<ref name="Ferriani2009">Ferriani, S., Cattani, G., C. Baden-Fuller (2009) "The Relational Antecedents of Project-Entrepreneurship: Network Centrality, Team Composition, and Project Performance", Research Policy, 2009, 38 (10): 1545–1558.[https://drive.google.com/file/d/0ByE7rCUuloTlM1NabFZra1RiUDg/edit?usp=sharing]</ref> These are organizations that have limited lifespans which are devoted to producing a singular objective or goal and get disbanded rapidly when the project ends. Industries where project-based enterprises are widespread include: [[sound recording]], [[film production]], [[software development]], television production, [[new media]] and construction.<ref name="Faulkner1987">{{cite journal | last1 = Faulkner | first1 = R. R. | last2 = Anderson | first2 = A. B. | year = 1987 | title = Short-term projects and emergent careers: evidence from Hollywood | url = | journal = American Journal of Sociology | volume = 92 | issue = 4| pages = 879–909 | doi=10.1086/228586}}</ref> What makes project-entrepreneurs distinctive from a theoretical standpoint is that they have to "rewire" these temporary ventures and modify them to suit the needs of new project opportunities that emerge. A project entrepreneur who used a certain approach and team for one project may have to modify the business model and/or team for a subsequent project.

Project entrepreneurs are exposed repeatedly to problems and tasks typical of the entrepreneurial process.<ref name="DeFillippi2004">DeFillippi, R., & Spring, S. 2004 Project entrepreneurs for project-based enterprises: Extension or complement to project management competencies? Projects and Profits, 4(2): 50-57.</ref> Indeed, project-entrepreneurs face two critical challenges that invariably characterize the creation of a new venture: locating the right opportunity to launch the project venture and assembling the most appropriate team to exploit that opportunity effectively. Resolving the first challenge requires project-entrepreneurs to access an extensive range of information needed to seize new investment opportunities. Resolving the second challenge requires assembling a collaborative team that has to fit well with the particular challenges of the project, and has to function almost immediately to reduce the risk that performance might be adversely affected.

Another type of project entrepreneurship involves entrepreneurs working with business students to get analytical work done on their ideas.

== Financing ==

=== Bootstrapping ===
Entrepreneurs may attempt to "[[Bootstrapping (corporate finance)|bootstrap-finance]]" their start-up rather than seeking external [[investor]]s. 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. As well, if investors have a significant stake in the company, they may be able to exert influence on company strategy, 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-evaluation IPO in order 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.

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".<ref>{{cite journal
| last1                 = Ebbena
| first1                = Jay
| last2                 = Johnson
| first2                = Alec
| title                 = Bootstrapping in small firms: An empirical analysis of change over time
| url                   = http://www.sciencedirect.com/science/article/pii/S0883902605000662
| journal               = Journal of Business Venturing
| publication-date      = November 2006
| volume                = 21
| issue                 = 6
| pages                 = 851–865
| doi                   = 10.1016/j.jbusvent.2005.06.007
| accessdate            = 2014-07-29
| quote                 = Bootstrapping has taken on many definitions in the literature, but there has been some recent consensus that it is a collection of methods used to minimize the amount of outside debt and equity financing needed from banks and investors (Winborg and Landstrom, 2001 and Harrison and Mason, 1997).
| year                = 2006
}}
</ref> Most commonly, entrepreneurs engaging in bootstrapping incur personal [[credit-card]] debt, but they may utilize a wide variety of methods. While bootstrapping involves increased risk for entrepreneurs, the absence of any other [[stakeholder (corporate)|stakeholder]] gives the entrepreneur more freedom to develop the company. Many successful companies, including [[Dell]] Computer and [[Facebook]], started by bootstrapping.<ref>{{cite web|url=http://richtopia.com/effective-leadership/10-successful-companies-started-bootstrapping-case-studies|title=Ten Successful Companies That Started by Bootstrapping|work=Richtopia|accessdate=21 May 2016}}</ref>

Types of bootstrapping include:<ref name="NarayananO'Connor2010">{{cite book|first1=V. K.|last1= Narayanan|first2=Gina|last2= Colarelli O'Connor|title=Encyclopedia of Technology and Innovation Management|url={{google books |plainurl=y |id=duIY77a2WRYC |p=60}}|date=15 March 2010|publisher=John Wiley & Sons|isbn=978-1-4051-6049-0 |p=60}}</ref>

* Owner financing
* [[Sweat equity]]
* Minimization of [[accounts payable]] (e.g., delaying bill payment)
* [[Joint utilization]]
* Minimizing inventory
* [[Government subsidy|Subsidy finance]]
* [[Personal debt]]

=== External financing ===
{{no footnotes |section|date=July 2014}}
Many businesses need more capital than can be provided by the owners themselves, and in this case, a range of options is available including:

* [[Angel investor]]s
* [[Venture capital]] investors.
* [[Crowdfunding]]
* [[Hedge fund]]s
* [[Alternative investment|Alternative asset management]]
* [[Line of credit]] or other loans

Some of these sources provide not only funds, but also financial oversight, accountability for carrying out tasks and meeting milestones, and in the case of angel investors and venture capital, business contacts, mentoring and experience. Many external financing sources provide financing in return for an equity stake in an entrepreneur's company.

=== Effect of taxes ===
Entrepreneurs are faced with [[liquidity constraint]]s and often lack the necessary [[credit (finance)|credit]] needed to borrow large amounts of money to finance their venture.<ref name=":2">{{Cite journal|last=Meh|first=Cesaire Assah|date=2002|title=Entrepreneurial Risk, Credit Constraints, and the Corporate Income Tax: A Quantitative Exploration|url=|journal=Bank of Canada, Working Papers 2002-21|doi=|pmid=|access-date=}}</ref>  Because of this, many studies have been done on the effects of taxes on entrepreneurs.  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.<ref name=":2" /> Donald Bruce and John Deskins found literature suggesting that a higher corporate tax rate may reduce a state's share of entrepreneurs.<ref name=":3">{{Cite journal|last=Bruce|first=Donald and John Deskins|date=2012|title=Can state tax policies be used to promote entrepreneurial activity?|url=|journal=Small Business Economics|doi=|pmid=|access-date=}}</ref>  They also found that states with an inheritance or [[estate tax]] tend to have lower entrepreneurship rates when using a tax-based measure.<ref name=":3" /> But another study found that states with a more [[Progressive taxation|progressive personal income tax]] have a higher percentage of sole proprietors in their workforce.<ref>{{Cite journal|last=Asoni|first=Andrea and Tino Sanandaji|date=2012|title=Taxation and the quality of entrepreneurship|url=|journal=J Econ|doi=|pmid=|access-date=}}</ref>  Ultimately, many studies find that the effect of taxes on the probability of becoming an entrepreneur is small.  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 <ref>{{Cite journal|last=Bruce|first=Donald and Mohammed Mohsin|date=2006|title=Tax Policy and Entrepreneurship: New Time Series Evidence|url=|journal=Small Business Economics|doi=|pmid=|access-date=}}</ref>

== Predictors of success ==

Factors that may predict entrepreneurial success include the following:<br><ref>D.S Adegbenro I.C.T Poytechnic Lecture on EED 126, 2015">Entrepreneurship Lecture( EED 126) in D.S adegbenro Polytechnic, on 1 July 2015. Nigeria</ref>

'''Methods'''
*Establishing strategies for the firm, including growth and survival strategies
*Maintaining the human resources (recruiting and retaining talented employees and executives)
*Ensuring the availability of required materials (e.g., raw resources used in manufacturing, computer chips, etc.)
*Using that the firm has one or more unique [[competitive advantage]]s
*Ensuring good organizational design, sound [[governance]] and organizational coordination
*Congruency with the culture of the society <ref name="Shane2008">{{cite book|author=Scott A. Shane|title=The Illusions of Entrepreneurship: The Costly Myths That Entrepreneurs, Investors, and Policy Makers Live By|url=https://books.google.com/books?id=clePgiDAoGQC|date=1 October 2008|publisher=Yale University Press|isbn=0-300-15006-7|chapter=7}}</ref>

'''Market'''
* Business-to-business (B2B) or business-to-consumer (B2C) models can be used
* High growth market
* Target customers or markets that are untapped or missed by others

'''Industry'''
* Growing industry
* High technology impact on the industry
* High capital intensity
* Small average incumbent firm size

'''Team'''
* Large, gender-diverse and racially diverse team with a range of talents, rather than an individual entrepreneur
* Graduate degrees
* Management experience prior to start-up
* Work experience in the start-up industry
* Employed full-time prior to new venture, as opposed to unemployed
* Prior entrepreneurial experience
* Full-time involvement in the new venture
* Motivated by a range of goals, not just profit
* Number and diversity of team members' social ties and breadth of their [[business network]]s

'''Company'''
* Written [[business plan]]
* Focus on a unified, connected product line or service line
* Competition based on a dimension other than price (e.g., quality or service)
* Early, frequent, intense and well-targeted marketing
* Tight financial controls
* Sufficient start-up and growth capital
* [[Corporation]] model, not sole proprietorship

'''Status'''
* Wealth can enable an entrepreneur to cover start-up costs and deal with [[cash flow]] challenges
* Dominant race, ethnicity, or gender in a socially stratified culture <ref>{{Cite journal | author = Perry-Rivers, P. |date=October 2014  | title = Stratification, Economic Adversity, and Entrepreneurial Launch: The Converse Effect of Resource Position on Entrepreneurial Strategy | journal = Entrepreneurship Theory & Practice |volume=40  |issue=3  |pages=n/a  | doi=10.1111/etap.12137}}</ref>

==  See also ==
{{Portal|Economics}}
{{Wikipedia books|Entrepreneurship}}
{{Wikiversity}}
{{columns-list|3|
* [[List of entrepreneurs]]
* [[Business administration]]
* [[Business opportunity]]
* [[Businessperson]]
* [[Corporate social entrepreneurship]]
* [[Entrepreneurship ecosystem]]
* [[Innovation]]
* [[Small Business Administration]]
* [[Spiral of silence]]
* [[University spin-off]]

}}

== References ==
{{reflist|25em}}

== Further reading ==
{{Wikibooks|Entrepreneurship}}

* {{cite journal | doi = 10.4135/9781446263433 | title=Small Business and Entrepreneurship | date=2008 | first=Robert | last=Blackburn| isbn=9781412934374 }}
* {{cite book|first=Erik |last=Bowman|title=Entrepreneur Training Manual, Third Edition: Certified Entrepreneur Workbook|url={{google books |plainurl=y |id=_-ewZwEACAAJ}}|date=July 2011|publisher=Guanzi Institute Press|isbn=978-0-9837862-9-0}}
* {{cite book |last1=Deakins |first1=D. |last2=Freel |first2=M. S. |title=Entrepreneurship and small firms |chapter=Entrepreneurial activity, the economy and the importance of small firms |publisher=McGraw-Hill Education |url={{google books |plainurl=y |id=jXzNngEACAAJ}}|year=2009|isbn=978-0-07-712162-4 |ref=harv}}
* Dana, Leo Paul 2010, "Nunavik, Arctic Quebec: Where Co-operatives Supplement Entrepreneurship," Global Business and Economics Review 12 (1/2), January 2010, pp.&nbsp;42–71.
* {{cite book|first1=Thomas N. |last1=Duening|first2=Robert A. |last2=Hisrich|first3=Michael A. |last3=Lechter|title=Technology Entrepreneurship: Creating, Capturing, and Protecting Value|url={{google books |plainurl=y |id=747tKaSdtgkC}}|date=21 October 2009|publisher=Academic Press|isbn=978-0-08-092288-1}}
* Entrepreneurship Resources: http://www.entrepreneurship.org/
* Entrepreneurship Lesson Plan [http://www.econedlink.org/teacher-lesson/228 http://www.econedlink.org/teacher-lesson/228s]
* {{cite journal | last1 = Foo | first1 = M.D. | year = 2011 | title = Emotions and entrepreneurial opportunity evaluation | journal = Entrepreneurship Theory and Practice | volume = 35 | issue = 2| pages = 375–393}}
* {{cite book |author=James W. Halloran. |title=Your Small Business Adventure: Finding Your Niche and Growing a Successful Business |year=2014 |publisher=ALA/Huron Street Press |isbn=978-1-937589-44-8 }}
* {{cite book|first1=João |last1=Leitão|first2=Rui |last2=Baptista|title=Public Policies for Fostering Entrepreneurship: A European Perspective|url={{google books |plainurl=y |id=YkVF7Jr_KwkC}}|date=10 June 2009|publisher=Springer Science  Business Media|isbn=978-1-4419-0249-8}}
* {{cite book|first1=Anders |last1=Lundstrom|first2=Lois A. |last2=Stevenson|title=Entrepreneurship Policy: Theory and Practice|url={{google books |plainurl=y |id=4Wkr2h4xqMEC}}|date=30 March 2005|publisher=Springer|isbn=978-0-387-24140-1}}
* {{cite journal | last1 = Minniti | first1 = M. | last2 = Moren | first2 = L. | year = 2010 | title = Entrepreneurial types and economic growth | url = http://econpapers.repec.org/article/eeejbvent/v_3a25_3ay_3a2010_3ai_3a3_3ap_3a305-314.htm | journal = Journal of Business Venturing | volume = 25 | issue = 3| pages = 305–314 | doi=10.1016/j.jbusvent.2008.10.002}}
* {{cite journal | last1 = Shane | first1 = S. | last2 = Venkataraman | first2 = S. | year = 2000 | title = The Promise of Entrepreneurship as A Field of Research | jstor = 259271 | journal = Academy of Management Review | volume = 25 | issue = 1| pages = 217–226 | doi=10.5465/amr.2000.2791611}}
* {{cite journal | doi = 10.1177/0266242613485767 | title=The genetics of entrepreneurial performance | journal=International Small Business Journal | date=2013 | volume=31 | issue=5 | pages=473–495 | first=S. | last=Shane}}
* {{cite journal | doi = 10.1016/j.jbusvent.2008.04.007 | title=A typology of social entrepreneurs: Motives, search processes and ethical challenges | journal=Journal of Business Venturing | date=2009 | volume=24 | issue=5 | pages=519–532 | first=Shaker A. | last=Zahra}}
* {{cite journal | last1 = Zhang | first1 = S.X. | last2 = Cueto | first2 = J. | year = 2015 | title = The Study of Bias in Entrepreneurship | url = https://www.researchgate.net/publication/260945337_The_Study_of_Bias_in_Entrepreneurship | journal = Entrepreneurship Theory and Practice | volume = 41 | issue = 3 | pages =  419–454| doi=10.1111/etap.12212}}

{{Private equity and venture capital}}
{{Aspects of capitalism}}

{{Authority control}}


[[Category:Business occupations]]
[[Category:Business models]]
[[Category:Business terms]]
[[Category:Entrepreneurship]]
[[Category:Management occupations]]
[[Category:Small business]]