A recent study reveals that family background is crucial for startups. Also, family money plays a vital role in the success of a startup.
According to the study, the primary sources of funding for successful startups usually come from their parents.
The chief economist of Israel's ministry of finance said, "There is a strong connection between your parent's income and your chances of becoming a startup entrepreneur, with those from a strong financial background having a higher chance of becoming entrepreneurs."
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Successful entrepreneurs who had family money and background
In an article published by The Guardian, it pointed out that the common denominator for some of the most successful startups worldwide is that they all had families that helped them in the beginning.
Some of the people mentioned in the article are:
- Bill Gates
- Elon Musk
- Jeff Bezos
- Mark Zuckerberg
- Michael Dell
- Phil Knight
The article also stated the helping hand offered by parents of these successful entrepreneurs.
For example, for Bill Gates, his mother introduced him to IBM executives, which led to the deal for his first operating system.
In the case of Jeff Bezos, his parents became the early investors for Amazon. Even Elon Musk has a wealthy background that helped him make his way through the industry.
For Mark Zuckerberg, Michael Dell, and Phil Knight, their parents either loaned them money or offered help.
Study: Family background, crucial for startups
The study conducted among Israeli entrepreneurs between ages 25 and 35 revealed that the most critical factor in starting up a business is the family money or background.
According to the recent study, "Having strong financial support can help someone interested in setting up a startup and providing a financial safety net in the case of failure."
This recent study, which reveals that family background is crucial for startups, is correlated to the findings of a study at the University of California. According to the researchers from Berkeley, "If one does not have money in the form of a family with money, the chances of becoming an entrepreneur drop quite a bit."
Although the family background is crucial for startups, intelligence, on the other hand, does not affect the decision of going into business.
According to the study, even if a person had low mathematic achievement tests, but the person belongs to a family with a high income, there is a high chance that they will become an entrepreneur.
The careers or level of education of the parents is also found to be connected to startups. According to the study, "That connection is even stronger if the parents studied science or technology."
Despite the connections, there is no assurance, however, that the entrepreneur will be successful.
