A Conversation with 590 Nascent Entrepreneurs

41 Pages Posted: 14 Jan 2008

See all articles by Jeffrey R. Campbell

Jeffrey R. Campbell

University of Notre Dame; Tilburg University

Mariacristina De Nardi

University College London, Economics Dpt.; Federal Reserve Bank of Chicago; National Bureau of Economic Research (NBER) - Public Economics

Date Written: November 2007

Abstract

This paper summarizes interviews from 1998 with 590 individuals trying to create a business centered around five questions: "Who are you?," "What are you trying to accomplish?," "What have you and others put into the business?," "What have you accomplished?," "What remains to be done?" There is a great deal of heterogeneity across these Nascent entrepreneurs, but they tend to have more education, higher household earnings, and more household wealth than the general population. Growing up in a family in which one or both parents had a business does not seem to be an important determinant of entry into entrepreneurship for males, while it seems to be of some importance for females. Most of the nascent businesses are in retail and consumer services, and about 50 percent of nascent entrepreneurs expect to become employers within five years of the business's birth. Most nascent entrepreneurs have already made personally-significant investments of time and money in their firms; and nearly all of them are saving for their firms out of non-business income. For about half of the sample, these investments have yielded a fully-specified product; and the remainder are still in the product development stage. Family and friends are an importance source of seed money for many Nascent Entrepreneurs. Formal credit markets have been requested for funds only by a minority of Nascent Entrepreneurs, and almost half of these applicants have been denied loans. About 40% of the Nascent Entrepreneurs believe that their businesses require significantly greater equity before they can attract external funds.

Keywords: PSED, Business Creation

JEL Classification: L26, M13

Suggested Citation

Campbell, Jeffrey R. and De Nardi, Mariacristina, A Conversation with 590 Nascent Entrepreneurs (November 2007). FRB of Chicago Working Paper No. 2007-20, Available at SSRN: https://ssrn.com/abstract=1083809 or http://dx.doi.org/10.2139/ssrn.1083809

Jeffrey R. Campbell (Contact Author)

University of Notre Dame ( email )

United States

Tilburg University ( email )

Tilburg, 5000 LE
Netherlands

Mariacristina De Nardi

University College London, Economics Dpt. ( email )

Gower Street
London WC1E 6BT, WC1E 6BT
United Kingdom

Federal Reserve Bank of Chicago ( email )

Research Department
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Chicago, IL 60604
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HOME PAGE: http://www.nber.org/~denardim

National Bureau of Economic Research (NBER) - Public Economics ( email )

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Cambridge, MA 02138
United States

HOME PAGE: http://www.nber.org/~denardim

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