Entrepreneurial Archetypes

Entrepreneurs come in all shapes and sizes, but they do tend to follow certain patterns.

The Soloist

The Soloist is a business owner who solely owns his or her business – it’s a one-man-band. The Soloist has no partners and no co-shareholders. The soloist may have her business entity as a corporation, an LLC or a sole proprietorship. The Soloist may work in their business on either part time or full time basis. The Soloist may or may not have employees who work for her. The Soloist, although alone in ownership of the venture, must still (if she has employees) be concerned with motivating and retaining key employees, funding and growing the enterprise, developing exit and transition strategies, controlling and managing risks, and taxes. But business planning is usually easier for the Soloist because there is no need to balance competing objectives between partners and shareholders.

The Hobbyist

The primary reason the Hobbyist starts and runs his business is not to create his own job, make a living, have a high return on investment, or create steady cash flows. Instead, the Hobbyist seeks to combine a business and a personal hobby or passion. An ancillary goal may be to make money, but the primary goal is always to do something that they absolutely love to do as a business venture. A Hobbyist can be a passive investor (Golfer), but more often than not they are an active owner in the business (Owner/Employee or Soloist). Examples of Hobbyists might be the owner of a comic book store or the owner of a small beekeeping operation.

The Owner/Employee

Owner/Employees are owners who work full time in their businesses. Owner/Employees’ businesses often represent much more than just investments; they are their jobs, careers and usually their sole source of income. Owner/Employees need their businesses to keep generating cash flows. They know that if their business goes under, they will end up working for someone else (a tough position for someone who is used to calling the shots).  The Owner/Toilers of a business, amongst themselves, often have very democratic ways of dealing with business issues and problems. Admission of a new Owner/Toiler owner to a business is a delicate affair and very sensitive; all of the Owner/Toilers will be working colleagues and entrusted with the success of the business. Also, the exit of an Owner/Toiler from a business is a sensitive matter. The day-to-day operations and health of the business can be greatly affected by the exit of a key departing Owner/Toiler.

The Indentured Servant

The Indentured Servant is a special category of Owner/Employee. A business owner is an Indentured Servant when the business she owns cannot function without her constant attention and input. The business of an Indentured Servant probably would not be able to continue operations or generate profits without the constant active labor input of its owner(s). Sometimes this occurs by design (where an Indentured Servant owner or owners truly love their business and working in it), but more often than not it occurs by accident and necessity. The owners of these types of businesses can often become trapped by them. The Indentured Servant may dislike working nonstop in her business, but she may feel she has no choice because she has too much money, time and sweat equity invested to change the equation. It is at this point when an Owner/Employee morphs into an Indentured Servant – a slave to their business.

The Golfer

A Golfer is a mainly passive investor (many long-standing real estate investors fit here) who does not work in the business she owns, although she might be involved in the highest level management decisions of the business. Golfers usually spend their time doing other activities (like golf) and hire others to deal with the day-to-day challenges of running the business. Golfers view their businesses as investments and will do whatever they can to maximize their return on those investments. Golfers are usually less risk adverse than Owner/Toilers and less concerned with their interpersonal relationships with their fellow co-owners.

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Nate Nead
Nate Nead is a licensed investment banker and Principal at Deal Capital Partners, LLC which includes InvestmentBank.com and Crowdfund.co. Nate works works with middle-market corporate clients looking to acquire, sell, divest or raise growth capital from qualified buyers and institutional investors. He is the chief evangelist of the company's growing digital investment banking platform. Reliance Worldwide Investments, LLC a member of FINRA and SIPC and registered with the SEC and MSRB. Nate resides in Seattle, Washington.
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