Myth of the Fearless Entrepreneur

Start-ups aren't as risky as you think. It's the lack of risk-taking that hurts growth / Corbis

What distinguishes an entrepreneurial leader from the rest of the pack? Most people would tell you it is a tolerance for risk, and most people would be wrong. Having studied 22 years of performance data on more than 7,000 growth companies, I discovered that the idea that entrepreneurs are, by definition, risk takers is a myth. Curiously, many entrepreneurial leaders actually lose their nerve as they become successful. That may sound like a reasonable trade-off, but this tendency can hurt a firm's chances for long-term success and growth.

When calculating the entrepreneurial risk involved, people often get the math wrong. Take...

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