They have paid salaries for more than 3 but less than 42 months. This period is usually the most challenging for entrepreneurs as it represents the time period where most ventures fail.
Established entrepreneurs are owner-managers of entrepreneurial firms who have been in business for more than 42 months and are currently managing a firm. They have survived the most difficult years of a startup company and may be looking to further grow their business or simply looking for an exit.
No matter the stage of entrepreneurship, this book will provide relevant information that will help the entrepreneur understand better the financial aspects of doing business in a global economy.
Becoming a Global Entrepreneur
More exciting international business opportunities are present today than any other time in the history of the world. The ability to be a global entrepreneur or to be born global is easier than ever due to the ability to communicate with and reach markets once considered impossible. What was once produced domestically is now done internationally. In fact, there is less and less distinction between foreign and domestic markets.
Global entrepreneurship creates wealth and employment benefiting individuals and countries throughout the world. International (global) entrepreneurship is “the process of an entrepreneur conducting business activities across national boundaries” (Hisrich, 2013, p. 7). It may take the form of exporting, selling goods from the Internet, opening an overseas sales office in another country, or establishing an entirely new operation. Being a global entrepreneur presents new problems but allows an individual to expand the sales/profits of a venture in ways previously not possible.
Is it the Right Time?
While an economic downturn can challenge many entrepreneurs, it doesn't mean it is not the right time to launch a new venture. In fact, history reveals that tough economic periods are appropriate for starting a new business. Out of 30 businesses from the Dow Jones Industrial Average, 16 were founded during a recession or depression: Walt Disney started in the mid-1920s and was a young startup during the Depression, Hewlett-Packard was launched in 1938 during the Great Depression, and Microsoft started to build its empire in the 1975 recession (Abrams, 2008). Instagram, a free photo-sharing application initially designed for mobile smartphones, was launched in the middle of the slowdown in 2010 (Waters & Nuttall, 2012). With only 13 employees, the company grew rapidly and acquired a large user base estimated at over 30 million in early 2012. Without ever generating any kind of revenue (their product was offered for free to users), the company was sold less than 2 years after its inception for $1 billion (Raice & Ante, 2012). At a time when companies do not even need to generate revenue in order to provide a successful exit for their founders and investors, it seems there has never been a better time than today to become an entrepreneur. Entrepreneurs look at problems as opportunities.
Is it Risky to Become an Entrepreneur?
Interestingly, there seem to be two predominant attitudes in the world toward entrepreneurs. One view is that entrepreneurs are some kind of heroes who shape the course of history and achieve tremendous success. Steve Jobs with Apple, Mark Zuckerberg with Facebook, Stelios Haji-Ioannou with easyJet, and Ratan Naval Tata with the Tata Group are inspirations who motivate others to follow their dreams and create their own ventures. Conversely, certain cultures may give merit to established entrepreneurs yet discourage nascent or new entrepreneurs to follow suit. In fact, nearly all graduates from college who visit their career centers in Europe will be offered advice on how to apply and seek a job, not advice on how to register a brand or form a company. Entrepreneurship still seems to be in most parts of the world a deviation from the norm and perceived as a risky career choice. For example, in Southern Europe, it is nearly impossible for banks to approve mortgage loans to self-employed entrepreneurs, even if their early stage venture income seems to justify a favorable decision (DaSilva, Janezic, & Hisrich, 2012). Banks prefer to give a loan to someone who has a lower salary but a “secure” job at a large corporation. This conventional position from banks and society does not seem to make sense nowadays, but still the practice prevails.
Given the mass layoffs of the past few years, is entrepreneurship riskier today than working at a big bank or law firm? A Harvard Business Review blog (Gibney & Howery, 2012) reveals that 215,417 jobs for attorneys will be available between 2008 and 2018, while over 430,000 new legal graduates will come out of universities during that same period. Those numbers indicate that only half will get a chance to get a job in their chosen field. There will be so many lawyers on the market for jobs that even those who get a job will probably have compensation packages that differ from the ones presently on the market. By contrast, the Kauffman Foundation did a survey of 5,000 entrepreneurial ventures started in 2004 in the United States (Robb & Reedy, 2012). Their results show that nearly 56% were still in business in the beginning of 2010 despite the world financial turmoil. Now if we consider financial rewards, entrepreneurs do have the possibility to make real money. Statistics from the venture capital industry reveal that 25% of first-time venture-backed firms are acquired for at least $50 million or file for an initial public offering (IPO) (Gompers, Kovner, Lerner, & Scharfstein, 2008).
Another positive feature of entrepreneurship is that motivated and happy people will usually perform better than individuals simply looking forward to their paycheck. In today's highly competitive market, only those who enjoy what they do and how they do it perform at a higher level.
This book will provide insights that will contribute to the success of any entrepreneur or investor seeking practical advice on how to measure performance and improve the financial state of an entrepreneurial venture in a global economy. Additionally, we will provide advice on how to reach and negotiate with investors to obtain the vital cash necessary for a venture to grow and eventually exit successfully.
Traits of a Global Entrepreneur
Several traits are common among entrepreneurs worldwide. These include cultural diversity, a strong desire to achieve, internal locus of control, clear vision, tolerance for ambiguity, integrity, and a global sense of responsibility.1 We will cover each briefly over the next pages.
1 For a thorough discussion of these traits as well as the need for global entrepreneurs, the topic of the next section, see Hisrich (2013) and Hisrich, Peters, and Shepherd (2013).
Cultural Diversity. Global entrepreneurs are individuals who are usually well traveled and who embrace cultural diversity both in and out of the workplace. They are not afraid of change or to face different sociocultural environments. They constantly seek challenges and new experiences with an “out of the box” feeling.
Desire to Achieve. Global entrepreneurs are willing to go the extra mile and face difficult and uncertain conditions to excel. Their desire to achieve allows them to go beyond cultural barriers and develop the set of skills required to succeed in an international environment.
Internal Locus of Control. Global entrepreneurs believe they and their team can intervene and influence the outcome of events and situations in a positive manner. They take responsibility for what happens and keep an open mind toward new ideas and potential solutions.
Clear Vision. Global entrepreneurs develop and maintain a clear vision as to where they are heading and make sure to share their vision with all stakeholders they interact with. They know employees must feel their work is essential for the success and prosperity of the global organization they integrate. Global entrepreneurs are positive, energetic, and confident individuals with both short- and long-term goals that express the vision of the venture.
Tolerance
