The current wave of successful entrepreneurs consider starting their wealth creation at a younger age in comparison to the older generation of self-made wealthy, a new report has revealed.
The study, conducted by BNP Paribas Wealth Management and Scorpio partnership, examined the behavioural patterns of successful entrepreneurs and angel investors and the findings show a demographic shift among entrepreneurs globally.
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Spanning across Europe, Asia, the US and the Middle East, the Global Entrepreneurialism Report analysed over 2,500 high net worth individuals (HNWI) and ultra-high net worth individuals (UHNWI) with a minimum current net worth (excluding primary residence) of $2 million and an average of $7.6m.
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By GlobalDataStarting young
According to the report findings, the average age for initially considering entrepreneurship is now 30 years (39 for the older generation), while the average age to start an entrepreneurial career is just under 32 years.
In the Middle East, career planning starts even earlier and soon-to-be entrepreneurs are just over 25 years when they start of launching their own business. Middle Eastern (78.4%) and Asian (67.7%) entrepreneurs show stronger business ownership history within their families compared to the Western markets. In the US, for instance, the average demographic for the same in 33 years.
The report said countries such as China, Hong Kong and Turkey are the ‘most conducive countries for entrepreneurialism’, with the potential to overtake leading markets such as the US, the UK, and Italy.
In China, entrepreneurs are not only wealthier (average wealth of £8.5m ($13.5bn)), but they also set themselves 44% higher goals, revealed the report. Additionally the findings said that the under 50s segment in China were more ambitious than their older peers in other regions.
Gender wise, India, Hong Kong and France appear to have a vibrant female entrepreneurial community with nearly half of successful entrepreneurs being women, the report also showed.
Successful women entrepreneurs typically launch about five businesses compared to 4.3 for their male counterparts. Also, $ 9.1m is the average turnover of a primary business run by a women, which is higher compared to the $8.4m average turnover of a business rub by a man.
Angels at work
Global Entrepreneurialism Report also explored the wealth creation patterns of angel investors, reporting that those aged 50 and under almost double their allocation towards angel investments in comparison to the older peers, and with higher returns (30.1% versus 18.4%).
Sofia Merlo, Co-CEO of BNP Paribas Wealth Management, said "The report reveals angel investors’ commitment as a true asset class, investing close to 10% of their allocation today."
Spanish entrepreneurs, in particular, have a higher total allocation, combining owned businesses and angel investments, at 42%, with China at 41% and Germany at 39%.
Angel investors also prefer investing in their home markets, where the preference is typically to allocate 75% of available angel investments capital, revealed the report.
The only exception to this trend is the Middle East, where 62% of angel investments take place abroad as the region thrives on liquidity, explains Scorpio Partnership’s Sebastian Dovey.
The motives for becoming an angel investor are not purely centred on financial return, concluded the report. Critical "emotional return" factors such as sharing knowledge, creating opportunities more broadly, and mentoring the next generation are also significant.
