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Growth Spurt

It's often said that youth is wasted on the young. But according to a number of studies, 18- to 34-year-olds are making good use of their youthful energy by starting or investing in businesses.

In its January 1997 report, A National Survey Among Stock Investors, the Nasdaq Stock Market found that 19 percent of Generation X investors expect to use the proceeds from the sale of their stocks to start a business. And preliminary statistics gathered in 1993 as part of the National Panel Study of U.S. Business Start-Ups found that seven out of 10 start-ups are launched by people aged 25 to 34.

"They are old enough to have experience and young enough to have the energy," says Paul Reynolds, professor of entrepreneurial studies at Babson College in Babson Park, Massachusetts, and coordinator of the National Panel Study of U.S. Business Start-Ups. "By the time people get into their 40s, they become accustomed to a certain career path and have a commitment in that direction."

Young U.S. entrepreneurs fall into two categories, says Reynolds. "One group seems to have full- or part-time employment, and the new business [is a] sideline. The other group seems more involved in starting a business," he says. The majority are male (60 percent) and white (73 percent).

The types of companies young entrepreneurs create range from manufacturing to service, with heavier concentrations in construction, retail and services.

These Xers are not impetuous egomaniacs whose eagerness to achieve causes them to fall by the wayside in larger numbers than other entrepreneurs. In fact, Reynolds found that their success rate mirrors the average.

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This article was originally published in the November 1997 print edition of Entrepreneur with the headline: Growth Spurt.

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