Sep
10

Entrepreneurial Planning Blog Topic 3

William Casey Asbill-Beck

ENT 600: Entrepreneurial Planning

Topic Three

 

Building Social and Financial Capital

(p. 47, The Founder’s Dilemmas)

 

The Founder’s Dilemmas begins by introducing readers to ideas about core concepts, control, wealth, and philosophies on being a “Founder.”  The book also provides a wide variety of case studies and examples of entrepreneurial start up businesses with explanations behind the various decisions made.  In chapter two, author Noam Wasserman discusses career dilemmas and pit-falls for individuals to look out for.  Examples of present and successful entrepreneurial endeavors are provided along with their start up decision and methods.  One idea Wesserman focuses on is how to gain and balance social and financial capital.  He also suggests that different forms of capital can directly affect the other forms of capital related to the business.  Social capital is defined by Wesserman as the durable network of social and professional relationships through which founders can identify and access resources.  Financial capital specifically refers to your accumulated cash.  The Founder’s Dilemmas suggests that an increase in even one type of capital can generate growth for the other forms of capital.  My experiences with two business start ups lead me to agree with Wesserman on the importance of social capital, especially during the initial stages of growth.  The accumulated social capital gave us a market to ask questions to and gain support from before either business officially opened.  Once opened, these supporting relationships were the first to shop and generate sales.  Wesserman does explain that financial capital can be used to increase social capital as well.  Financial capital can allow businesses more opportunities to spend time advertising and building relationships.  By finding a way to balance the two capitals one can try and spark a virtuous cycle of building social and financial capital.

 

Comments

  1. I agree! I think Wasserman made some excellent points in talking about the value of social capital. Before this chapter I never realized that social capital could have such a benefit to a start up but now I realize that it really is an essential part to your success as a business owner.

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