In this article, we talk about the 4 types of entrepreneurs. Most times a new venture is referred to as entrepreneurship. A few days ago, we talked about the meaning and distinction between a startup and entrepreneurship. Today’s discussion walks through the types of entrepreneurs so that you can decide which type of network you need to aspire for.

In practical terms, this distinction is helpful to attract the corresponding type of investors or being in the incubators. As an entrepreneur, it is extremely important to be in the right network. If you can categorize your business in the right industry, type of entrepreneurship, it will give you the best chance of channelling your resources and network. You will be able to find more details on types of entrepreneurship and sub-varieties in this hub spot article.

Meaning of Entrepreneur:

An entrepreneur is someone who starts a business or a company. It doesn’t matter whether you are creating an innovative venture or a small business. You will qualify under the name of an entrepreneur as long as you can register a business and conduct its activities. An entrepreneur can even be a solo founder or fall into a crude definition called solopreneur. 

A startup however demands that you plan for aggressive growth. The purpose of a startup is not merely growth but an aggressive one. A scalable startup focuses on creating value and aggressively increasing shareholder investment. The ultimate goal of a startup is to grow immensely or be acquired by a private equity firm which gives the founders a big payout at the end.

In the following segment, we discuss the 4 types of entrepreneurs as below:

Types of Entrepreneurship

Small Business Entrepreneurs

The characteristics of small business entrepreneurs are: a small number of employees, generally offering existing product or services. Not many small businesses focus on providing innovative or new solutions. Most times, funding for this small business entrepreneurship are either self-funded/bank loans or family and friends. They don’t usually go through a large funding round either through seed investment or venture capital funds.

The key distinction for small business entrepreneurship is that it is not designed or planned out to be a fast-growing company at the outset. It is built with the intent of being small and working in a lean operational model.

Scalable Startup Founders

We talked about scalable startup in detail in our last article – scalable startup entrepreneurship definition. One of the most aspired types of entrepreneurship is to create a startup. The key distinction for this type of entrepreneurship is to create a business model to scale. It generally follows the J Curve or hockey curve mode of expansion of the business.

From the outset, a scalable startup is about creating value. The initial few years of a startup runs a loss only to stagger and grow exponentially when the product and market are realised. Once the product-market fit is found, the profits are reinvested in the business to grow at a large scale to return value to the investors and founders.

Social Entrepreneurs

I have a personal liking for social entrepreneurship. These types of businesses have a social impact at the heart of their business plan. Sure, profits are important. However, it is not the primary motive for these types of entrepreneurs. The drive is to create a lasting impact. Some examples include climate change, alleviating poverty, education, etc.

They follow the same route as that of a normal business plan. However, this type of entrepreneurship is different from an NGO or a charity where the focus is less on growth and more on sustenance. Social entrepreneurship does borrow the growing philosophy from a startup, but with the social impact at its centre

Intrepreneurs

Most times entrepreneurship is connected to starting a business from scratch. If you are someone who doesn’t want to leave the current company you’re working for but yet have an entrepreneurial mindset, this is the perfect opportunity. As an interprenuer, you will be a part of the business and can use the opportunities and leverage position in the business. The business idea will be limited to the areas of work the business is interested in and the company will own a certain part of your idea.

But, you will be able to drive your agenda and thoughts as a proper business plan. You will of course have board meetings and stakeholder conversations to convince the investors about your direction and strategy. It will be as if you are running a business of your own but without the risk of leaving your job or the corresponding salary. It is an exciting opportunity to leverage on resources of a company which makes it easier for you to gain customer and market validation, surveys etc. The initial path will be much easier. However, the loss is that the company will own a certain chunk of your business.

Summary: Types of Entrepreneurs

As you can see, although entrepreneurship is central to the types of entrepreneurship defined above, they are all distinct in certain details. It depends on your preference and approach. Each of these ideas is a fascinating field on its own to pursue and create an impact in the entrepreneurial world.

The 4 distinct types are based on areas of impact, types of operations and purpose of the business. If you are clear about the purpose and impact you want to create, the next step is to find accelerators or incubator networks that can boost this idea and help to build it further.