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Take the Illusions of Entreprenurship Quiz - published by Yale University Press
Illusions of Entrepreneurship

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The Illusions of Entrepreneurship:

The Costly Myths That Entrepreneurs, Investors, and Policy Makers Live By

Do you understand the reality of entrepreneurship or do you believe the myths?

Answer each question by clicking on your answer to each of the questions below. Your final score will appear at the bottom of the page. If you have a low score, don’t worry— Illusions of Entrepreneurship provides the answers to these questions and much more.

Plus if you are one of the first 10 people to email your answer to the bonus question, you will win a free copy of the book!*

Good Luck!




1. What percentage of U.S. households owned a business in 1983 and 2004, respectively?

a. 14.2 percent in 1983 and 11.5 percent in 2004

b. 10.5 percent in 1983 and 16.1 percent in 2004

c. 11.1 percent in 1983 and 12.1 percent in 2004

d. 18.5 percent in 1983 and 14.3 percent in 2004



2. In 2005, what percentage of the U.S. adult-aged population was in the process of starting a business?

a. 2 percent

b. 13 percent

c. 15 percent

d. 20 percent



3. Of 394 metro areas tracked by the Census, what metro area had the highest per capita rate of firm formation from 1995 to 1996?

a. Anniston, Alabama

b. San Jose, California

c. Laramie, Wyoming

d. Austin, Texas



4. What is the most common reason why people start new businesses?

a. To get rich

b. Because they don’t want to work for someone else

c. Because they have no other alternative

d. To work fewer hours



5. Of the following countries, which has the highest rate of new business creation per capita?

a. United States

b. Japan

c. France

d. Peru



6. What percentage of new single establishment businesses are alive five years after starting?

a. 10 percent

b. 30 percent

c. 45 percent

d. 70 percent



7. How many companies receive venture capital financing in the United States each year?

a. 30

b. 300

c. 3,000

d. 30,000



8. On average, how many companies went public in the United States annually from 1996 to 2006?

a. 10

b. 50

c. 300

d. 700



9. Which number best approximates the typical capitalization of a new business?

a. $5,000

b. $25,000

c. $125,000

d. $500,000



10. What percentage of founders expects their businesses to have fifth year sales of more than $100,000?

a. 10 percent

b. 50 percent

c. 75 percent

d. 90 percent



11. What percentage of software firms founded annually achieve more than $50 million in sales by the time that they are five years old?

a. 0.4 percent

b. 4.0 percent

c. 9.1 percent

d. 14.4 percent



12. What proportion of people starting a new business manage to get it “up and running” within seven years?

a. 10 percent

b. 33 percent

c. 66 percent

d. 95 percent



13. What percentage of the U.S. labor force works in companies that are less than two years old?

a. 1 percent

b. 10 percent

c. 25 percent

d. 80 percent



14. What is the average number of employees of a U.S. start-up when it is started?

a. 1

b. 5

c. 10

d. 100



15. What percentage of five-year-old businesses in the United States is home-based?

a. 10 percent

b. 22 percent

c. 46 percent

d. 72 percent



16. What is the most common source of financing for a U.S. start-up?

a. Venture capitalists

b. Friends of the entrepreneur

c. The entrepreneur’s savings

d. Banks



17. What percentage of the financing of new businesses less than two years old takes the form of debt?

a. 5 percent

b. 14 percent

c. 52 percent

d. 81 percent



18. How much more likely are men than women to start businesses?

a. 2 times

b. 3 times

c. 4 times

d. 5 times



19. What was the ratio of White to Black self-employment in 1910 and 1990?

a. 10:1 in 1910 and 2:1 in 1990

b. 5:1 in 1910 and 4:1 in 1990

c. 3:1 in 1910 and 3:1 in 1990

d. 2:1 in 1910 and 2:1 in 1990



20. What percentage of start-up efforts each year have at least one employee ten years later?

a. 100%

b. 9%

c. 4%

d. 2%

BONUS QUESTION. What percentage of one-year old companies provides health insurance to their full-time employees?

a. 5.2%

b. 23.2%

c. 45.8%

d. 76.2%


Email us the correct answer and you could win a free book! The first ten people to email us the correct answer to the bonus question will receive a free copy of Scott Shane's book, Illusions of Entrepreneurship. See additional rules and contest information below.

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