Is there a difference between entrepreneurs and business owners?
The terms entrepreneur and business owner are often used interchangeably. At a recent XPX-D.C. Metro breakfast, the two panelists were introduced as serial entrepreneurs and, it is true, each had founded four unique businesses. And although this was an Exit Planning Exchange event, these entrepreneurs did not talk much at all about how they transferred their ownership shares when they sold. Instead, they jumped right into the description of the next business they started or bought.
At one point, one of the entrepreneur panelists said, “I bought or started each of my businesses with the end in mind, with an eye toward selling.” This is also why you hear the term entrepreneur associated with venture capitalists. When a v.c. invests in a company, they want to know the exit for the liquidity event – usually a sale to a strategic investor or to another financial investor, or an I.P.O, within three to seven years of the investment.
But that doesn’t describe a lot of business owners I know. Most business owners, I believe, think longer-term. The business becomes part of his or her identity. The focus is on building the business, employing an ever-increasing number of workers, developing a paternalistic image and possibly passing the business along to family, but generally not thinking of a specific deadline to sell.
I think that this distinction is important for advisors who are advising owners – are they business owners or entrepreneurs?
What do you think? Is there a difference? What does that mean for them and for their advisors? Please share your thoughts.