Thursday, May 29, 2014

6 Myths about entrepreneurship refuted by research

Myth 1:    You have to be smart to be rich.
Fact:      People of high intelligence are just as likely to make poor financial decisions and get themselves into money trouble, even bankruptcy, according to J. Zagorsky, a research scientist at Ohio State University's Center for Human Resource Research, in his paper, "You Don't Have To Be Smart To Be Rich, Study Finds," in the journal Intelligence, 2007.
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Myth 2:    You need an MBA to start a business. 
Fact:      Having a formal business education actually negatively affects the mindset of people who are interested in becoming an entrepreneur and retards new-business formation.  This according to researchers John-Erik Mathisen and Associate Professor Jan Ketil Arnulf at BI Norwegian Business School, in their study, Competing mindsets in entrepreneurship: The cost of doubt in The International Journal of Management Education, 2013.
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Myth 3:    It’s easier to start a business in many other countries around the world.
Fact:      The USA is the most entrepreneurial economy in the world, according to the 2014 Global Entrepreneurship and Development Index. The researchers determined that the US is a world leader also for female entrepreneurship.
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Myth 4:    Venture Capital Is the Primary Source of Start-Up Funding
Fact:      Historically, less than 1% of U.S. companies have raised capital from Venture Capitalists.   After peaking in the late 1990s, the number of active VC firms fell from 744 to 526 in the decade 2001–2011, and the amount of venture capital raised was just under $19 billion in 2011, down from $39 billion in 2001, according to the National Venture Capital Association (NVCA).

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Myth 5:    Self-employed people are much more satisfied with their careers and lives than people who work as “wage slaves.”
Fact:      James A. Roberts, the W.A. Mays Professor of Entrepreneurship at Baylor University, finds in his research that the levels of job satisfaction of self-employed people register only a fraction higher than those who work for an organization.  "We found that entrepreneurs are more satisfied, but maybe not as much as folklore would suggest," said Roberts of research he conducted with former Baylor sociology professor Don Bradley. "(Self-employment) may be a good solution and certainly plays a vital role in our economy. But it's not a bed of roses."
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Myth 6:    People become self-employed for the money.
Fact:      "The lure of entrepreneurship or self-employment is very strong in America. People want to be their own boss,” says Roberts (ibid).  “Also, the chance for greater financial remuneration is very important. But I think people go into it for the lifestyle -- the autonomy and responsibility that come with self-employment. The idea of job satisfaction. They enter because they figure they would be happier."

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