I hate to sound like a broken record (or like I’m on the McGraw Hill payroll), but the BusinessWeek website continues to impress me with their depth and variety of content for entrepreneurs. The Small Biz section of the BW website—companion to the quarterly printed edition—is loaded with a range of useful pieces, from quick hit video clips and blog posts, to deeper dives on important topics like financing and operations.
In particular, I appreciated their recent two-part series in by John Tozzi in The New Entrepreneur column on the topic of risk (part one Entrepreneurs and Risk, and part two Two Risk Profiles of Entrepreneurs). I’ve written about this in the past, but I think it is one of the most critical principals for would-be entrepreneurs to understand. One of the most common reasons for not pursuing that start up dream is that it is “just too risky,” but these articles do an excellent job of illuminating the truth about risk. In fact, the first article sites a recent survey by Small Business Labs indicating that in today’s economy most entrepreneurs actually feel they are less at risk leading their own venture than they would be working for someone else.
The second article in the series analyzes two risk profiles: the first is of the business funded completely by the personal wealth of the entrepreneur; and the second of the investor-funded start-up. Tozzi points out that investor funding—while filled with potential downsides, can provide a freedom that can be critical to visionary entrepreneurs. “The VC model lets start-ups swing for the fences, with the understanding that a lot of times they’ll strike out, but that won’t leave the founder flat broke.”
Be sure to read the comments on each of these posts for some excellent anecdotal reporting.