Stereotypes about Successful Entrepreneurs

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

11 Pages Posted: 29 Mar 2023 Last revised: 12 Jun 2023

See all articles by Victor Lyonnet

Victor Lyonnet

Ohio State University (OSU)

Léa H. Stern

University of Washington - Michael G. Foster School of Business

Date Written: June 7, 2023

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.

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

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

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

Victor Lyonnet (Contact Author)

Ohio State University (OSU) ( email )

Columbus, OH 43210
United States

Lea H. Stern

University of Washington - Michael G. Foster School of Business ( email )

Box 353200
Seattle, WA 98195-3200
United States

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