From Pain to Power — How to Understand the Link Between Childhood Trauma and Entrepreneurship The link between childhood trauma and entrepreneurship highlights the remarkable capacity of humans to transform pain into power.

By Matthew Gallagher

Opinions expressed by Entrepreneur contributors are their own.

Childhood trauma can leave deep and lasting scars. Yet, for some, these early life experiences catalyze resilience, creativity and entrepreneurial spirit. Trouble in childhood has been correlated with success later in life. Of course, it has also been linked to mental disorders, drug addiction and homelessness.

Is there a recipe for success as it pertains to a difficult upbringing?

Understanding childhood trauma

Childhood trauma encompasses distressing experiences in early life, such as abuse, neglect or witnessing violence. These events can significantly impact a child's mental, emotional and physical development, often leading to long-term consequences.

Children exposed to trauma may develop survival mechanisms and coping strategies, including emotional withdrawal or hyper-vigilance. While these strategies may be necessary in a traumatic environment, they can become maladaptive in other contexts.

Disassociation is often used as a coping mechanism for children to protect themselves. This often lasts into adulthood, where one may find themselves "tuning out" during moments of stress. The effects of trauma can affect mental health, relationships and overall quality of life. Factors like supportive relationships, individual resilience, and access to therapeutic resources can, however, influence outcomes. Some individuals may even experience post-traumatic growth, developing valuable skills and insights due to their experiences, which can be particularly relevant in the entrepreneurial journey. Some have been quoted as saying they have a "superpower," and their troubling backgrounds have given them an edge over the competition.

Related: 5 Ways Our Trauma Manifests in Entrepreneurship

The link to entrepreneurship

Research has shown a surprising correlation between childhood trauma and entrepreneurship. A study found that individuals who experienced adverse events in childhood were more likely to become entrepreneurs. But why might this be the case?


One explanation lies in the concept of resilience. Childhood trauma can, unfortunately, teach children that the world is unpredictable and challenging. Yet, this harsh lesson can also foster resilience – the ability to adapt and thrive despite adversity. This resilience can be a powerful asset in the world of entrepreneurship, where uncertainty and setbacks are commonplace. The will to survive and the strength to overcome hardships are often more important than intelligence and aptitude alone.


Childhood trauma can often serve as an unexpected catalyst for creativity. In the face of adversity, children may find themselves needing to think creatively to navigate and survive their challenging circumstances. This may involve finding unique solutions to problems, imagining alternate realities as a form of escape, or expressing their emotions through art, music or storytelling.

This honed ability to think outside the box can become a valuable skill in entrepreneurship. In a business landscape that is continually evolving and highly competitive, the ability to innovate is crucial. Entrepreneurs are often faced with complex problems that require unique solutions. They need to anticipate market trends, develop novel products or services and find new ways to engage customers.

Moreover, creativity in entrepreneurship isn't just about coming up with new ideas - it's also about seeing connections between existing ideas, adapting and improving upon them. This kind of creative thinking often aligns with the experiences of those who have faced childhood trauma who have had to adapt and find resilience in the face of adversity.

Additionally, the creative process itself can be therapeutic and empowering. For individuals who have experienced trauma, channeling their experiences into a creative venture can provide a sense of purpose and control. It can foster empathy and connection, as they may create products, services or businesses that address needs or challenges they have personally experienced.

In this way, the creativity stimulated by childhood trauma can serve as a powerful tool for entrepreneurs, driving innovation, fostering resilience and enabling them to make a unique impact on the world.

Risk tolerance

Entrepreneurship is a journey fraught with risks. Individuals who have experienced childhood trauma may be uniquely equipped for this aspect of entrepreneurship. Exposure to unpredictable circumstances in childhood can develop a heightened ability to assess and manage risks, make decisions under pressure and adapt to change.

As adults, these individuals carry this risk tolerance into their entrepreneurial ventures. They are more willing to take calculated risks, whether investing in a new idea, entering a competitive market or pivoting their business strategy. The "going for broke" mentality is common practice with these individuals, most likely because they know how to climb out of a bad situation.

Entrepreneurs must balance this risk tolerance with careful decision-making. Conducting thorough research, seeking advice and considering the potential impacts of their decisions is essential.

Related: 5 Ways to Protect Your Mental Health

The double-edged sword

While the correlation between childhood trauma and entrepreneurship is fascinating, it's important to note that this relationship is a double-edged sword. While some individuals may channel their experiences into entrepreneurial success, others may struggle with the long-term effects of trauma, such as mental health issues or difficulties with trust and relationships. Support and resources must be available for all individuals affected by childhood trauma, regardless of their entrepreneurial aspirations. What has been studied is that there is almost a "correct amount" that influences the genius mind and sparks a drive to become entrepreneurial. "The Drama of the Gifted Child" by Alice Miller is a remarkable study of exactly this.

The link between childhood trauma and entrepreneurship highlights the remarkable capacity of humans to transform pain into power. It reminds us that our past experiences, however difficult, can shape our strengths and abilities surprisingly. It is also a reminder of the importance of supporting those who have experienced trauma, ensuring they have the resources and support they need to heal and thrive, whether they choose to channel their experiences into entrepreneurship or not.

Matthew Gallagher

Entrepreneur Leadership Network® Contributor

CEO of Watch Gang

Matthew Gallagher is a Los Angeles based founder and CEO. Matthew oversees the day to day business operations of several businesses with over $300m in sales. Matthew's childhood in poverty made him passionate about helping others and led him to becoming a committed philanthropist.

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