Is entrepreneurship a rich person’s game?
by Kelly Pipes
A humanity-changing gem of a business idea is in everyone — in their heart, head or scribbled on scrap paper and stuffed in a draw (waiting patiently). The startup community holds this belief tightly, which is why this blog was written. We wanted to open up the tricky subject of riches and risk to the Huckletree floor, for the community to integrate.
Is entrepreneurship a rich person’s game? Are those who grew up with financial security more willing to start startups. Can this be true?
Heaps of success stories reject the idea that entrepreneurship isn’t confined to monied individuals, sitting pretty with the world at their feet. That said, a green envious hue might cloud your spirit at the news of a fast-tracked product launch, quick-fire recruitment drive or startup expansion — all funded by readily available personal capital or gifted seed money.
Again, is entrepreneurship a rich person’s game? You might ask yourself the question a million times as you sheepishly eye your startup ambitions. You wonder how your rent will get paid. If I was already rich would my startup app already be in testing? Would my yoga programme be out there already, (mindfully) living and breathing in the world?
Riches, risk and real-life: thoughts from the field
1. Count on survival skills and motivation
Lu Li, founder and CEO of Blooming Founders invites us to consider how we define entrepreneurship, saying she believes in 2 types of entrepreneur:
“You can be an entrepreneur out of opportunity or an entrepreneur out of necessity. People, who are entrepreneurs because they spotted an opportunity, tend to have more financial security. They will be more likely to bootstrap their business and work on their idea until they have ‘figured things out’, simply because they can afford to.”
“But you can also be very successful as an entrepreneur, when you start from nothing. By default, you’ll have to make money to survive. These necessity-entrepreneurs tend to be hustlers with great sales skills.
Sofia Fominova, founder and CEO of the startup Mealz, doesn’t entirely agree that entrepreneurship is a rich person’s game, saying:
“To launch a startup you need seed capital and a high tolerance for risk. ‘Rich kids’ might find it easier to get initial capital from friends and family and might also be less sensitive to the consequences of a failed venture. It does not, however, mean that startups are games for rich kids only.
“Nowadays, the abundance of information online allows anyone to easily learn how to start a business and make it successful,” she continued.
“What is more, it is much easier to raise capital from professional investors or even via crowdfunding these days. It takes courage, passion and a lot of motivation to start a business, but anyone who is willing to learn can do it.”
2. Financial security V laser-focused resourcefulness
Perhaps you grew up in a financially secure environment. Perhaps not. Either way, your journey into entrepreneurship will be unique to you. Perhaps you were raised in lean times, with sustainability and frugality as the norm. Did you inherit a make-do-and-mend mentality? Can resourcefulness a savvy entrepreneur make?
Keit Kollo, Director of StartupBus Europe 2016, highlights resourcefulness, saying:
“Is it easier to start something if you have financial security? Absolutely! Does this mean it’s a rich person’s game? Not really.
“I think people who have less are often willing to go to greater length to make startups profitable and are remarkably driven. That means spending more time in the office, making smarter hires and being resourceful. They know how to keep their costs low and margins high!”
3. Perhaps you’re richer than you realise
Rent has to be paid, food eaten and wellbeing maintained, yes. But, the question of riches can run deeper than the slim figure on your bottom line. When floored by the question of wealth, riches and landed advantage, try to weigh up your 360 resources and take heart.
Startup founders have rich seams of creativity and disruptive ideas running through them. Budding startup founders are often flush with industry contacts. You might have a wealth of priceless skills and experiences that raise your stock.
4. How much is enough?
Gavin Reay of Litecup contributes, saying:
“My view is [that] the perfect entrepreneur has enough money to create the space and time to start the enterprise, but not enough that they don’t need it to succeed.”
Entrepreneurs create time and space with money, says Gavin, by “renting an office, paying the bills while you start the business — before the business pays you a wage.”
Over to you
How did or do you settle your nerves? Please share your thoughts.
For example, what are your tips for pulling up your bootstraps, seeking funding, self-funding your project or working around the clock (and around your startup) to cover essential living and business costs?
Share your stories with us!
