Survey: More Entrepreneurs Using Personal Savings for Business

More entrepreneurs are willing to put their own money on the line for business, according to the second annual Kauffman Foundation/LegalZoom survey of new business owners. While fewer entrepreneurs experienced difficulties gaining access to credit in 2013, the survey finds more decided to invest their own personal savings into their new ventures, jumping 20% to 86% overall in 2013. Additionally, more new entrepreneurs turned to credit cards, retirement savings and bank or home equity loans than they did in 2012. LegalZoom CEO John Suh says this is a good sign for the outlook on Main Street. “[F]ew actions correlate more directly with economic confidence than personal investment. Investing personal savings to start a business when credit is readily available signals high conviction in the future,” said Suh in a statement released by LegalZoom.Women Entrepreneurs Holding Their Own According to the survey, 35% of entrepreneurs who started businesses in 2013 were women – an increase of four percentage points over 2012. While four points is hardly a huge jump, the researchers behind the survey say it could be more proof of a recovery economy. According to the survey, “[A] rising share of female entrepreneurship could be due to more men getting back into salaried work (or fewer leaving it).” And while the survey found that the educational attainment among the new business owners stayed roughly the same from 2012 to 2013, female entrepreneurs were increasingly better educated than their male counterparts. More women had achieved both master’s degrees and professional degrees or doctorates than men. Additionally, women are no longer lagging consistently behind men in terms of business revenue. In fact, slightly more women than men posted revenues between $500,000 and $1 million in 2013, though three times as many men than women earned upwards of $1 million. The Kauffman/LegalZoom survey is based on data from 720 business owners who formed their companies using LegalZoom in 2013.