Are you rich in social capital?

Objectives Examine social capital in the context of entrepreneurial behaviors Explore the impact of social capital on success as an entrepreneur Assess your social capital

Macroeconomic Change Entrepreneurial Motivation Entrepreneurial Behavior Confidence Risk tolerance Interpersonal skills Social capital Industry Condition Industry Status Opportunity Identification Value Curve Competition The Opportunity Analysis Canvas TM Entrepreneurial Mindset

Take a moment to consider 4 groups 1. List up to 5 individuals per group (4) who you would classify as: –Most trusted friends (trusting) –People with whom you accomplish work with (working) –Individuals important to a current project or goal (supporting) –Social circle members (socializing) –Maximum 20 total names across the 4 classes of people. OK to repeat names in different areas. OK < 5 names. Fred Barney WilmaBetty Dino Ex: Trusting (repeat for other 3 groups) 2.Draw lines based who knows one another “well” within each groups 3.For each of the 4 groups, count the number of lines (relationships)

Calculating Density and Effective Size Network(A) # of people (max 5) (B) # of relationships among them (how many lines did you draw) (C) Max. # of relationships = 2*A (D) Density = (B/C)*100 (E) Redundancy = (2*B)/A (F) Effective Size = A - E Trusting Working Supporting Socializing

Calculating Density and Effective Size Example Network(A) # of people (max 5) (B) # of relationships among them (C) Max. # of relationships = 2*A (D) Density = (B/C)*100 (E) Redundancy = (2*B)/A (F) Effective Size = A - E Trusting Working Supporting Socializing Trusting and Working networks are very cohesive. − I can benefit myself and others from expanding this. Supporting and Socializing networks are very expansive. − I can benefit myself and others by connecting it.

Analyzing Network Composition The more diverse the better for ‘social capital’ Age: 5 years Education: Less, Same, or More Gender Ethnicity Experience: Corporate, Startup, Government, Education, Non-profit, etc. Expertise: Business, Engineering, Arts, etc.

Types of capital Financial capital Manufactured capital Human capital Intellectual capital Social capital

Defining social capital “resources available in and through personal and business networks” Social in social capital emphasizes that these resources are not personal assets; no single person owns them. –Information, ideas, leads, business opportunities, financial capital, power and influence, emotional support, even goodwill, trust, and cooperation Resources reside in relationships

It’s not only ‘who you know’… …it’s ‘who you know’ knows Social capital depends on who you know, the size, quality, and diversity of your personal and business networks. Beyond that, social capital also depends on who you don’t know, if you are indirectly connected to them via your network

Why build social capital? People with rich social capital are: –Better informed –More creative –More efficient –Better problem solvers With the right networks, people: –Save time because they know where to get the information they need –Foster cooperation and collaboration –Work smarter

Raising capital through social capital 75% of new businesses find and secure financing via their social networks –Capital seekers and providers find each other via friends, colleagues, acquaintances, and well- connected business associates such as attorneys, insurance agents, and accountants. Relationships also play a critical role in financing for “middle market” or midsized firms

Building Entrepreneurial Networks Use preexisting programs, procedures, practices, organizations, and structures –Volunteering –Alumni clubs –Professional associations Make new programs, procedures, practices, organizations, and structures –Organize activities and events to build your network

Summary Social capital is exceptionally valuable Map and track your network Keep the friends you have –Contact information is now easier than ever to catalogue and query Be willing to get involved in new things –Volunteer organizations –Alumni clubs –Professional associations