Member Article

Entrepreneurial traits

It’s Entrepreneurship Week on Bdaily. Nick Hungerford, CEO of online personal investment manager Nutmeg details the identifiable traits of an entrepreneur.

• An entrepreneur is someone who thinks about risk in terms of ‘risk is not doing something’ rather than ‘risk is doing something’
• An entrepreneur has to be prepared to make sacrifices with his or her time, not have people tell him how great he is or thank him

There are distinct types of entrepreneurs:

• Lifestyle entrepreneur: Someone who wants to run a business that provides an adequate income and does not require equity funding or high amounts of capital to get going. These are the majority of entrepreneurs – owner-managed businesses with a small number of staff

• Entrepreneurs who set out to build a large company to become very wealthy or to change the world: These people tend to appreciate that in order to grow the pie you may not necessarily own all of it and venture investment may be required. Rapid growth is expected and there are consequences (such as the founder not ending up as the CEO) if targets are not met. These are the entrepreneurs who you generally read about, the Googles and Facebooks.

• It is important for someone to understand which type of entrepreneur he or she is and want to be. Neither would be satisfied with the others’ ambitions and lifestyle, or end result.

• If you decide that you want to change the world, then more often than not you will have to raise external capital. This could come from friends and family but it might also come from professional investors. These could be ‘angels’ i.e. individuals or from venture capital firms.

• It is best to approach people who have specific expertise in areas that you are attempting to build a company in. For example, if you are starting an e-commerce business then you would be well-served to find investors who have experience in this area and that can help you

• The key to getting funding is preparation. When you have a meeting with a potential investor you should be fantastically prepared and able to answer any question they throw at you. Inevitably in your first few meetings there will be questions that you can’t answer. But, this must never happen with the same question twice. If you don’t know the answer, go away and find it so you know for the next meeting

• Don’t get hung up on investors that say “If you do this, this and this or if so and so invests…” Everyone would love to invest when you have built and proven you have the next Facebook and recruited the best people, but you need the money now, so if someone says no then move on.

When you recruit a team, choose carefully between homogeneity and diversification

• It is important to establish the right culture of company, so you want people who act according to your values and will support the norms that you set for the business
• However, it is also important that you bring different viewpoints into the room so that you aren’t all thinking exactly the same thing and alternatives are aired and given due consideration

Entrepreneurs must recognise that having opposing views is a positive and must be capable of dealing with them and deciding which path to follow. If you are uncomfortable with confrontation, make sure discussions are set up in the right manner so that the optimal viewpoint rises to the top.

This was posted in Bdaily's Members' News section by Nick Hungerford .