Are entrepreneurs born or raised? This is an important question because startups represent one of the most promising avenues for career success for young generation entering the job market. A number of factors influence whether someone will become an entrepreneur, such as having varied life experiences, diverse social relationships, and deep knowledge in a domain. But evidence shows that the family matters, too.

While exposure to entrepreneurial role models helps raise future businessmen and businesswomen, there is no guarantee that parents’ entrepreneurial traits will naturally appear in their offspring. There is no entrepreneur gene, and most character traits associated with business owners dissipate within two generations. Being raised in an entrepreneurial household is the single biggest predictor of a young person’s inclination toward new venture creation. In other words, it all starts at home. But running a business can be demanding, pulling entrepreneurs away from the home and discouraging their kids from following in their absentee parents’ footsteps. Entrepreneurs shouldn’t shield kids from business, but let them learn from it.

A family business, in addition to being a family matter, is also a personal matter for children. An entrepreneurial career is very much influenced by what takes place in personal life and family. They prefer taking small steps with their business ideas and not hurry to continue their family businesses.

The way in which parents communicate and reward their children during childhood and adolescence is a major determinant in shaping their entrepreneurial spirit. Demanding hard work while also responding to children’s questions and the need for self-determination helps boost entrepreneurship instincts. Kids are encouraged to question and think for themselves while being held to a high standard. Parents might, for example, make their children participate in a sport or activity and stick it out for at least a year, but let the child select the sport.
Responsive parenting that encourages asking questions and that gives children input into the decisions
fosters strong self-esteem and creativity, but if it is not joined by demanding performance expectations, competence, and work ethic will be underdeveloped. These are the children who get praise for trying, whether or not they worked hard, stuck with it, or accomplished anything. Research shows that demanding yet responsive parenting is best overall for encouraging the development of skills and characteristics conducive to future entrepreneurship.
Inflexible family structures – with unchanging roles and task assignments – discourage the pursuit of novel ideas and encourage conformity. Just as business founders need to handle a variety of changing responsibilities, children’s roles and task assignments should expand and evolve as they mature. At the other extreme, overly flexible families lack stability and introduce too much change – no one knows who is responsible for dinner or clean. Children don’t learn the discipline and commitment required to become a successful entrepreneur.

Parents can be inspiring role models who fuel entrepreneurial abilities and motivation in their children. Parents who are not entrepreneurs can still foster openness and motivation for entrepreneurship by being demanding but responsive, and by creating a moderately flexible and cohesive family structure.

With increased awareness of how parents and families shape children’s ability development and motivation about entrepreneurship, our hope is that millennials and those who follow will be increasingly willing and able to find and pursue entrepreneurial opportunities.