Week 3: Discuss “Building Social and Financial Capital”

social-capital2

ENT 600 – Week 3

Who is responsible for your success, as an entrepreneur? Can you be a lone success, especially in a long run?

I had many chances to attend many Exit Conventions in the past, since I worked with my husband as a Broker/Realtor, and last March at a NOEW 2016 (New Orleans Entrepreneur Week – The hub of Entrepreneurship in the South), on Fulton Street. This is just a co-incident happened during our vacation and I was glad that at least I saw what was going on in this event.

There were many successful entrepreneurs came from all over the corners in the south of the country. I learned there was one common thing when they talked about was: “Being an Entrepreneur is a lot of things, but easy is not one of them”

Is it fun? Yes

Do you make a lot of money? Yes.  But for some, as mostly starter, working a long time without earning income before seeing the fruits of their labor, is a part of normal.

There are so many things featured their success. Building, using social and financial capital is among those.

What is social capital? It is resources (intangible, invisible, re-searchable resource access for information, influences, trust, reputation…) and is made up from relationship.

Life as a founder/entrepreneur is nothing like an episode of “Shark Tank”. That’s just TV. One of the biggest hurdles is building and raising capital. Once you have worked long and hard enough to startup your business, then to get your business off the ground, you will need capital to grow it. You deserve every opportunity to share your unique gift with the world. You surely need human capital, some backup and some bridges. “Do you think investors would line up, willing and ready to write million-dollar check? Not sure.”, said the co-founder and CEO Brian Bordainick. The important thing is you working hard to make investors believe in what you do.

Everyone has social capital but it’s up to you to choose to use it with greater wisdom and purpose. Everyone has a part to play, for example if you see yourself as an employer, the part you can play is looking at your employment pipeline: who you are hiring, where to get them to add value to your company and to your industry.

“Research has shown that people who accumulate more social capital before founding are able to attract more human capital and financial capital with which to launch the startup, and to do so more quickly.” (p.48 The Founder’s Dilemmas)

“Savvy financial advisors know that our connections to other people and the resources they can provide are just as important as financial capital in building our practices.”

 

Sources:

The Founder’s Dilemmas of Noam Wasserman

Many You Tubes videos

 E Book: Your social network advantage

 Social Capital and the power of relationship

NOEW The Magazine vol. II at www.NOEW.org

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15 thoughts on “Week 3: Discuss “Building Social and Financial Capital”

  1. Mary,

    I would think building capital is difficult to find investors, I don’t know what would be the process of finding social capital of people willing to invest in your company before it is really off the ground. It seems almost that you have to have your business launched in order to show investors what it is, and then seek out money. Which is partly why I am trying to do a business where investors wouldn’t be needed for startup costs. So I could slowly start and sell things online or to locals and build on that myself. I would love help, I don’t want this to be a one man show, but I am not sure how to find willing people to help me launch a business besides my family and even they can only help so much.

    Thanks,

    Mackensie

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    • Mackensie,

      It’s very true that it is hard to find investors, especially before the business off the ground. The good news is there are so many investors out there who is willing to be a part of any size and shapes of businesses, as long as your business shows great potential and makes great profits. I think they will find you through social capital.

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  2. The quote you cite from page 48 of The Founder’s Dilemmas rings true. It seems like one shared trait of many well-known entrepreneurs is the ability to motivate the people: whether those are investors contributing money or employees contributing labor.

    I remember reading a story of an early employee at Amazon who worked in the packing department. At that point Amazon’s business had outpaced their staffing. The employee was working very long hours during an eight month period…so much that he forgot to retrieve his car from the parking lot for all those months. He apparently wasn’t checking his mail. When he did months later, he found that his car had been ticketed multiple times, booted, then towed to the city impound lot. After several warnings from the towing company that went unanswered, his car had finally been put for auction and sold. (This is from The Everything Store by Brad Stone).

    Kind of nuts but that is a motivated employee, isn’t it?

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  3. Mary,

    For someone to invest in your ideas before they become a reality, the idea has to either be so compelling that people can imagine the results before they exist or people need to know and trust you. If the latter is the case, what they are really investing in is you and their confidence in your ability to succeed. Thus, that social capital that you are developing along the way is incredibly important.

    Thanks for your post!
    Jeremiah

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  4. Hello Mary,
    Entrepreneurs try their best to take advantage of all of the surrounding resources, such as you did on your vacation. I think that convention would be an excellent event to make and build your social capital for your company or at least be able to talk with other entrepreneurs about their capital struggles. It sounds like you are doing just that, reaching out to attend different entrepreneur events and attending them no matter where you are, even during your vacation. You are so right about many of us already having social capital, but it is up to us to use it with greater wisdom and purpose! I definitely like how you mentioned how we already have this and to use it wisely. Thanks so much for your thoughts!

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    • Hi Colleen,

      Thank you for your feedback.
      Any opportunity to meet people and learn from them, exchange business cards. You just never know this social capital may someday lead to a referral, create a sale or recruit with your business.

      See you on your blog soon.

      Mary

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      • Hi Mary, Did you have a chance to read Nick’s blog on social and financial capital? It mentioned chance opportunities in reference to a good story. It was a great read, in case you are interested. Talk to you soon!!
        Colleen

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  5. Hi Mary!

    That was a great post, very well done. You mentioned how real life entrepreneurship is nothing like Shark Tank – and that made me chuckle because up until I started studying entrepreneurship 2.5 years ago, I used to really love that show. Then I realized it’s not very accurate haha. But your post was great. I especially liked how you pointed out that everyone has social capital – it’s simply how we choose to go about using it. Some will use it better than others, and some will build and maintain it better than others. We just have to realize that it is out there, and we can have it if we’re willing to put in what it takes to get it.

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  6. You right, being an entrepreneur can be fun, but isn’t easy. I spoke with an entrepreneur who shares many of the sentiments mentioned in your post. “Shark Tank” (I cringed at the percentage of ownership part) is “Just TV” and doesn’t give the full scope of entrepreneurship. An entrepreneur has to work long and hard enough to prove their business worthy of investments.
    I enjoyed your post and the candidness.

    Like

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