Bala Vissa

All of society would benefit if successful entrepreneurs used their skills to promote positive social change. A lot has been written on how to start and grow a venture. Comparatively speaking, there’s been less research on exits, the stage at which successful entrepreneurs sell their company and, often enough, get enough money to retire if they choose to. That’s because such success is hardly typical. Entrepreneurship is a mortal combat, with few winners.

Bala Vissa, INSEAD Professor of Entrepreneurship | February 28, 2022 Even modestly connected entrepreneurs are six times more likely to succeed in accessing early-stage investors – if they push the right buttons. If you have a brilliant business idea coupled with family as well-connected as Bill Gates’ mother or as financially supportive as Jeff Bezos’s parents, your company might find itself among a small percentage of successful start-ups. In reality, the vast majority of start-ups fail.

Image: Shutterstock Compared to fifty years ago, there are now much fewer publicly listed family-controlled firms in the United States. But those that remain have been shown to have some advantages from the perspective of retail investors. For example, when their CEOs are drawn from the controlling family, they tend to be paid less, as their compensation includes a non-pecuniary perk: the warm and fuzzy feeling of helming a family heirloom.