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I've heard it surmised that the biggest advantage the United States has in terms of entrepreneurship is our incredibly lax bankruptcy laws. It's easy to start a

by enjo 11y ago

I've heard it surmised that the biggest advantage the United States has in terms of entrepreneurship is our incredibly lax bankruptcy laws. It's easy to start a company, fail, and maintain the ability to do it again. This is partly cultural (we don't look down on failure very much) but also is structural (failing doesn't ruin you for life). That isn't true of many countries.

bogomipz 11y ago
I don't think anybody thinks "I will start a business because I have favorable bankruptcy laws." I'm not even sure what you mean by favorable. an LLC or an S Corp is a business entity designed to limit the risk exposure of an individual if they form one. And yes there are provisions in the law to allow you to restructure - namely because it allows your creditors a chance to get paid but there's nothing "lax" about that. Entrepreneurship is definitely culturally engrained in the US. Starting a business although risky is generally lauded. I think Entrepreneurship is a very accessible concept to most Americans - most people in the US know someone that has started their own business.
fefifofu 11y ago
Also surmising here, I would assume a more socialist country would be more fail-friendly. More support available if I hit rock bottom. I'm from Canada and not being able to afford health insurance for my family sounds terrifying.
cylinder 11y ago
The biggest advantage is just the huge market and tremendous amount of capital the country has flowing around. Reserve currency status imports even more capital (to our detriment). I think Americans who haven't analyzed other nations don't realize how different the capital availability is here vs abroad, from real estate to corporates to startups. This is why the economy basically froze when the credit markets seized. The large market drives the entrepreneurial culture, because the stakes are so big if you "make it" here, and market sizes for even the most niche things become viable for an entrepreneur to chase with investors in tow. Not so in smaller markets. Most success is in spite of our poor government, inefficient land use, and entrenched inequality. Chapter 11 is fascinating, I studied it extensively in school. I would not say it drives entrepreneurship but rather large corporate risk taking maybe. Startups aren't thinking about restructuring options. Besides, startup investors are after equity, not debt; Chapter 11 is about reorganizing debt, with secured debt the higher priority, at the expense of equity holders.

by enjo 11y ago

bogomipz 11y ago

I don't think anybody thinks "I will start a business because I have favorable bankruptcy laws." I'm not even sure what you mean by favorable. an LLC or an S Corp is a business entity designed to limit the risk exposure of an individual if they form one. And yes there are provisions in the law to allow you to restructure - namely because it allows your creditors a chance to get paid but there's nothing "lax" about that. Entrepreneurship is definitely culturally engrained in the US. Starting a business although risky is generally lauded. I think Entrepreneurship is a very accessible concept to most Americans - most people in the US know someone that has started their own business.

fefifofu 11y ago

Also surmising here, I would assume a more socialist country would be more fail-friendly. More support available if I hit rock bottom. I'm from Canada and not being able to afford health insurance for my family sounds terrifying.

cylinder 11y ago

The biggest advantage is just the huge market and tremendous amount of capital the country has flowing around. Reserve currency status imports even more capital (to our detriment). I think Americans who haven't analyzed other nations don't realize how different the capital availability is here vs abroad, from real estate to corporates to startups. This is why the economy basically froze when the credit markets seized. The large market drives the entrepreneurial culture, because the stakes are so big if you "make it" here, and market sizes for even the most niche things become viable for an entrepreneur to chase with investors in tow. Not so in smaller markets. Most success is in spite of our poor government, inefficient land use, and entrenched inequality. Chapter 11 is fascinating, I studied it extensively in school. I would not say it drives entrepreneurship but rather large corporate risk taking maybe. Startups aren't thinking about restructuring options. Besides, startup investors are after equity, not debt; Chapter 11 is about reorganizing debt, with secured debt the higher priority, at the expense of equity holders.