Stereotypes about Successful Entrepreneurs

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.

Keywords: entrepreneurship, startups, deal selection, stereotypes, venture capital

JEL Classification: G24, G41, J16, L26, M13, D83, D8

Suggested Citation: Suggested Citation

Lyonnet, Victor and Stern, Lea H., Stereotypes about Successful Entrepreneurs (June 7, 2023). Fisher College of Business Working Paper No. 2023-03-004, Charles A. Dice Working Paper No. 2023-4, American Economic Association: Papers and Proceedings, May 2023, Available at SSRN: https://ssrn.com/abstract=4403485 or http://dx.doi.org/10.2139/ssrn.4403485