At the 65th annual FCEM (global network for women entrepreneurs) congress held in Rome on 20 and...
2018 Global Entrepreneur Report: the search for positive impact
What are the investment practices and trends among successful entrepreneurs? Over 2,700 leading entrepreneurs from around the world responded for the fourth edition of the Global Entrepreneur Report. The main takeaway is that investments with a positive impact on society now dominate the agenda.
Snapshot of these “Elite Entrepreneurs”Produced together with Scorpio Partnership, the 2018 Global Entrepreneur Report is the result of a wide-reaching international survey conducted in the third quarter of 2017 of 2,700 successful entrepreneurs.
Their profile? Women make up 40% while another 40% are under 36. On average, each entrepreneur provides employment to 166 people and generates an average primary company revenue of $25.1 million.
Five main entrepreneur-investor classes
Behind this typical snapshot, we distinguish five further entrepreneur profiles on the basis of age, gender or wealth, each of which employs slightly different investment strategies.
- Ultrapreneurs have a net investable wealth of $25 million or more. Their average primary company revenue for 2016 was $25.1 million. 67% of Ultrapreneurs are “responsible investors,” focusing on environmental and social concerns. They invest in this way to create jobs (41%), safeguard the environment (38%) and support the transition to clean energy (32%).
- Serialpreneurs own or have established four or more operating companies. They began their entrepreneurial ventures the earliest, at age 25 on average. Their average net worth is $20.1 million. Serialpreneurs focus on using their wealth strategically to support other high-potential firms. They typically allocate 15% of their portfolio to angel investments and private equity to invest in new companies.
- Millennipreneurs are young entrepreneurs 35 years old or under (born between 1982 and 2000). Their average primary company revenue was $27 million in 2016; they already have a personal net worth of $15.6 million.Around 46% of Millennipreneurs define their professional success in terms of the positive social or environmental impact generated by their business, compared to 39% of all entrepreneurs. The majority, however, feel their investments in this area remain inadequate and plan to further invest in environmental and social projects in the future.
- Women Entrepreneurs account for 40% of respondents and have an average personal net worth of $14.1 million. Their average primary company revenue in 2016 was $26 million. Women Entrepreneurs are more likely (37%) than men (33%) to hold Environmental, Social & Governance (ESG) investments to ensure their investments have a positive impact.
- Boomerpreneurs are 55 years old and over and account for approximately 16% of respondents. On average, they started their first company 25 years ago.They are even more convinced than younger generations that their business has generated a positive social impact since its inception. But, only 45% of them own investments geared towards social or environmental outcomes, with equity funds and environmental investments as their favored vehicles.
How can a business generate positive impact?
According to the report, the positive impact generated by their business has become a defining criterion of professional success for 39% of respondents—compared to 10% just two years ago. This is a sea change that holds true around the world.
For an entrepreneur, positive impact can be achieved through their professional activity, their investments or personal actions. Beyond the strict limits of the professional sphere, a business with a positive impact therefore aims to make the world a better place both from a social and environmental standpoint.
Over the past 12 months, the concept of positive impact has become a priority for the majority of Elite Entrepreneurs: 55% state they have invested part of their wealth to achieving socially-responsible outcomes. They are also convinced that commitments take on a greater scale when they translate into economic activity: 80% believe that entrepreneurship is the most effective way to generate a positive local or global impact.
Cultural and geographical differences
Social impact priorities are interpreted differently depending on one’s country of origin. In China, the primary aim is to safeguard the environment (53%), while in Europe it is to contribute to clean energies; in the USA and the Middle East, job creation ranks top of the impact agenda (36% and 40% respectively).
Key investors to accelerate change
Elite Entrepreneurs say they want to intensify their investments in projects with a social impact (29%). “Millennipreneurs” are the ones heading the charge: 64% are already actively involved in social impact investment, notably towards job creation.
Co-CEO BNP Paribas Wealth Management Sofia Merlo gives evidence of this major shift: “the rapid change of mindset is impacting the ways Elite Entrepreneurs invest their wealth. Responsible investments have recently reached a volume of more than $10 billion; this is a tenfold growth in 6 years. This trend clearly illustrates our customers’ growing appetite for these types of strategies.”
the rapid change of mindset is impacting the ways Elite Entrepreneurs invest their wealth.
Whatever their origins or history, these Elite Entrepreneurs recognize that their success as entrepreneurs and investors heavily relies on adopting a socially responsible state of mind.
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