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Growing entrepreneurial businesses
A selection of talks on Management, Leadership & Organisation
Hello, my name is Ed Hess. I'm a Professor of Business Administration at the Darden Graduate School of Business, the University of Virginia, in Charlottesville, Virginia. Thank you very much for joining me today. We're going to spend time today discussing growing an entrepreneurial business.
I'd like to begin our discussion by saying, first of all congratulations, you have successfully survived the challenges of starting a business, and do you know, most people don't survive the challenges of start-up. You are profitable and now you want to grow. Today I'm going to share with you what I've learned about the new challenges you will face. I've spent 10 years studying the challenges of growing companies.
I'm going to share with you the findings of my research project where I studied 54 high growth entrepreneurial companies. Now, these companies were broken down into two types of companies; companies that sell primarily products, and then companies that sell primarily services. They were geographically dispersed in 23 different states in the United States. The average age of the companies was 9.6 years. Their average revenue at the time that I studied them a couple of years ago was $60 million. The revenue range, the smallest company had about $5 million of revenue, and the largest company had $350 million of revenue. So as you can see these companies grew in a very broad way, from up to 0-5 million, or 0-350 million.
Before getting into what my findings were, let me tell you a little bit about the background of the entrepreneurs I studied. 34 of these entrepreneurs had prior work experience in the industry. By that I mean, they had worked for companies that were selling similar products, or services that they went out and started a company to sell, they had prior industry experience. 23 of the 54 entrepreneurs had no prior start-up experience. By that I mean, they had never either started a company or worked in an entrepreneurial start-up venture. 40 of the companies were not institutionally funded. By that I mean, those companies self-funded, or family helped fund, or they borrowed on their credit cards, they did not have venture capital or private equity capital, or even bank financing. 34 of the companies had more than one founder, and that meant two, and we had the highest number of founders were five in one company. Five of the 54 companies were started by women.