What causes an individual to take all the social, psychological, and financial risks involved in starting a new venture? At first there was limited research on this aspect of entrepreneurship, but since 1995 there has been an increased interest in entrepreneurial careers and education. This increased interest has been fostered by such factors as the recognition that small forms play a major role in job creation and innovation; an increase in media coverage of entrepreneurs; the awareness that there are more entrepreneurs than those heralded in the media, as thousands upon thousands of small cottage companies are formed; the view that most large organizational structures do not provide an environment for self-actualization; the shift in employment, as women become increasingly more active in the workforce and the number of families earning two incomes growls and the formation of new ventures by female entrepreneurs at three times the rate of their male counterparts.
In spite of this increase, many people, still, do not consider entrepreneurship as a career. A conceptual model for understanding entrepreneurial careers, views the career stages as dynamic ones, with each stage reflecting and interacting with other stages and events in the individual’s life – past, present, and future. This life cycle approach conceptualizes entrepreneurial careers in nine major categories; educational environment, the individual’s personality, childhood family environment, employment history, adult development history, adult non work history, current work situation, the individual’s current perspective, and the current family situation.
Although there exists a common perception that entrepreneurs are less educated than the general population, this opinion has proved to be more myth than reality. Studies have found entrepreneurs overall, and female entrepreneurs in particular, to be far more educated than the general populace. However, the types and quality of the education received sometimes do not develop the specific skills needed in the venture creation and management process. For example, some female entrepreneurs are at more of a disadvantage than their male counterparts in this respect, as they frequently do not take significant business or engineering courses.
Childhood influences have also been explored, particularly in terms of values and the individual’s personality. The most frequently researched personality traits are the need for achievement, focus of control, risk taking, and gender identity.
The research on the childhood family environment of the entrepreneur has had more definitive results. Entrepreneurs tend to have self-employed fathers, many of whom are also entrepreneurs. Many also have entrepreneurial mothers. The family, particularly the father or mother, plays an important role in establishing the desirability and credibility of entrepreneurship as a career path. As one entrepreneur said: “My Father and mother always encouraged me to try new things and do everything very professionally. They wanted me to be the vary best and have the freedom and independence of being my own boss.”
Employment history also has an impact on entrepreneurial careers, in both a positive and a negative sense. On the positive side, entrepreneurs tend to have a higher probability of success when the venture created is in their field of work experience. This increased success rate makes the providers of risk capital particularly concerned when this work experience is not present. Negative displacement (such as dissatisfaction with various aspects of one’s job. being fired or demoted, being transferred to an undesirable location, or having one’s spouse take a new position in a new geographic area) encourages entrepreneurship and new venture formation.
Although no definitive research has been done on the adult development history of entrepreneurs, it appears to also affect entrepreneurial careers. Development history has somewhat more of an impact on women, since they tend to start businesses at a later stage in life than men, usually after having experienced significantly more job frustration. There is a similar lack of data on adult family/ non work history. Although there is some information on entrepreneurs’ marital and family situations, the available data add little to our understanding of entrepreneurial career paths.