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Stereotypes about Successful Entrepreneurs

Author

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  • Lyonnet, Victor

    (Ohio State U)

  • Stern, Lea H.

    (U of Washington)

Abstract

What comes to mind when thinking about a successful entrepreneur? Belief formation models suggest that what comes to mind is an oversimplified picture of the characteristics of successful entrepreneurs, i.e, stereotypes about successful entrepreneurs. Using French administrative data on 48,767 new firms, we show that some characteristics are stereotypical of success and have distributions that can generate miscalibrated beliefs. To illustrate how stereotypical thinking can lead to biased assessments, we report the discrepancies between the implied fraction of successful entrepreneurs under Bayesian vs. stereotypical thinking for several stereotypes. We discuss the consequences of stereotyping for venture capital allocation.

Suggested Citation

  • Lyonnet, Victor & Stern, Lea H., 2023. "Stereotypes about Successful Entrepreneurs," Working Paper Series 2023-04, Ohio State University, Charles A. Dice Center for Research in Financial Economics.
    • Handle: RePEc:ecl:ohidic:2023-04
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    More about this item

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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