What Makes an Entrepreneur?

As we start to invest our first fund, I find myself considering what really makes a great entrepreneur.  What experiences and life events lead someone to create a business and invest in their own ideas? Here are some common threads I have observed after interacting with entrepreneurs for over 40 years:
  1. In the genes. What do the Sainsburys (groceries), Rothschilds (banking), Oppenheimers (DeBeers), Johnsons (Fidelity), and Fords (autos) have in common? Those are just a few examples of the fact that entrepreneurs sometimes come from a family of entrepreneurs. On a less lofty level, it’s clear why many entrepreneurs trace their roots to parents who opened up that first drug store or cafe. Seeing the fruits of your parents’ labor directly lead to your own college education is a powerful experience.
  2. Early obstacles. Many entrepreneurs have had to overcome significant problems at a young age.  A common theme in entrepreneurs’ stories is those who have limited means often have unlimited imagination. Dyslexics such as Charles Schwab and Richard Branson (Virgin) are known for their creativity. Others faced economic constraint. Howard Schultz (Starbucks) was raised in the Brooklyn projects. I grew up watching Oprah in her first big news role; she wore potato sack dresses as a child. Still others faced parental opposition, like Larry Ellison of Oracle who was told by his stepfather that he would never amount to anything. Unable to approach problems the same way as others, they invented new solutions.
  3. Education outside the box. Most entrepreneurs will never set foot on the Harvard campus (or they’ll exit early). They may forego formalized education altogether. And they don’t need it. Being part of a system isn’t what generates creativity and self-sufficiency; figuring out how to navigate a system without traditional credentials does. Everyone knows the dropout stories of Apple’s Steve Jobs and Microsoft’s Bill Gates. But the same applies to director James Cameron, entertainer Lady Gaga, Facebook’s Mark Zuckerberg, and casino magnet Kirk Kerkorian.
  4. Techie genius doesn’t equal CEO. Great entrepreneurs and great coders aren’t necessarily the same thing. I also think this depends on approach. A coder looking to solve problems might make a terrific founder, while one who does it for the beauty of elegant code might not. Sure, if an idea requires excellent software or technical innovation, an imaginative technical co-founder is a must. But the insightful engineers behind BASIC and Fortran did not have years of experience in BASIC and Fortran.
At Launch Angels, we support entrepreneurship in all its forms. We’re strong proponents of crowdfunding because of its potential to ‘widen the net’ of entrepreneurs’ ideas. And we’re happy to find many managers via crowdfunding that fulfill or even expand our definition of great entrepreneurs.

 -Shereen Shermak, CEO

Launch Angels is a Boston-based venture capital firm that helps alumni, universities, and other affinity groups create venture funds to support early stage companies that meet each fund’s unique investment goals.

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