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One Definition Does Not Fit All: The Four Quadrants of Entrepreneurship

Guest Article People tend to think that all entrepreneurs are alike — that everyone who starts a business is the same, that they have the same challenges, the same needs, the same motivation, the same end game. And that’s simply not true. Working in communities across the country, we’ve found that it’s helpful to cast a wide net in describing entrepreneurs and the resources that support them. It takes more than just one type of business to create a healthy, economically vibrant community. It takes all four quadrants of entrepreneurship. Entrepreneurs and the companies they lead are different—and that’s exactly what makes working in this field, in matching entrepreneurs with the right resource at the right time, both exhilarating and challenging. Quadrants of Entrepreneurship  Entrepreneurs aren’t all the same, and the companies they lead aren’t either. So perhaps a more helpful classification would be to define entrepreneurs by the type of companies they lead and their goals for growth. Entrepreneurs fall into four categories: Main Street, Microenterprise, Second Stage and Innovation-Led. To give a perspective on the numbers, here’s a breakdown of the quadrants of entrepreneurs across the United States. Microenterprise:  77%  23,836,937 Main Street 21% 6,822,074 Innovation-Led 1% 289,817 Second Stage 1% 280,540 Starters (people thinking of starting a business): 14,806,479 Big business (employ more than 100): 170,653 Innovation-Led Innovation-led enterprises are businesses in which research and development brings forth an innovative product or process.  The innovation typically involves intellectual property that contributes to a strong competitive advantage in the marketplace and serves as a foundation for a high rate of growth. Often formed around life sciences or technology innovations, these enterprises can require significant funding and specialized facilities. Owners are willing to give away equity to investors to secure the financial resources they need to grow.  These businesses may cluster around research institutes and universities as technology is transferred from research labs into the marketplace. Second Stage Second-stage enterprises have survived the startup phase and have owners who are focused on growing and expanding. The second-stage firms generally have between 10 to 99 employees and/or $750,000 to $50…

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