The four most important factors for entrepreneurial success are prior work experience, learning from successes and failures, management teams, and luck.
Networks and financing also were important factors. However, when asked about sources of funding, few took venture capital or angel financing in their first ventures. The lesser role of venture capital funding implied by the responses indicates that perhaps this avenue of funding is less useful for first-time entrepreneurs than even bank funding. Further, the lack of importance entrepreneurs place on investor advice implies that they value “smart money” less than expected, and that entrepreneurs are even more self-reliant than previously assumed.
The lack of reliance on alumni networks also implies that the stated value of attending a top-grade institution, with one of the explicit goals being to obtain access to the alumni network, has been overstated as a benefit for start ups. However, lessons learned in college are greatly valued, particularly for alumni of Ivy League schools.
The emergence of professional networks as an important success factor for start ups implies that such weak yet functional ties are perhaps the most useful as opposed to close personal ties or extremely weak ties like those found in alumni networks. This could be a fertile area for study of social networks with regard to start ups.
Understanding what makes entrepreneurs successful could help develop better policies to foster entrepreneurship and increase the numbers of high-growth companies.
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