Ultrapreneurs: Drivers of Job Creation
Improving society by improving employment prospects: that’s the business and investment strategy of the world’s wealthiest entrepreneurs.
Ultrapreneurs are the ultimate Elite Entrepreneurs and their success suggests responsible business practices enhance, rather than detract, from wealth generation, according to the 2018 BNP Paribas Entrepreneur Report.
This year’s study interviewed 2,706 Elite Entrepreneurs worldwide, analysing their activities through various lenses including age, geographical location and gender. One-in-five were “Ultrapreneurs”, defined as those with a net investible wealth of $25 million or more, and who on average employ 382 people.
Two-thirds of Ultrapreneurs describe themselves as responsible investors, with environmental and social business investments being their preferred causes. Their motivations for responsible investment? A total of 41% of Ultrapreneurs say they invest responsibly to create jobs, 38% are motivated by a desire to protect the planet and 32% want to accelerate the transition to clean energy. These strategies are evidently succeeding – three-in-four Ultrapreneurs say their profits rose in 2016 and on average forecast an 8% increase in net income this year, while their primary company’s revenue is more than double that of the typical Elite Entrepreneur.
French businessman Fabrice Grinda, 43, is one such Ultrapreneur. Having begun his career as a consultant for McKinsey & Co, the Princeton economics graduate quit the conventional corporate world aged 23 to launch his first web-based start-up Aucland. His venture became so lucrative he could have retired before hitting 30.
Motivation to help people
Instead, he launched more businesses, and today is the co-founder of New York’s FJ Labs, which has invested in around 400 tech start-ups, including Alibaba, Delivery Hero and Uber. So why did he eschew the easy life in favour of putting in the hard hours at the office?
“If you go back 200 years, over 90% of the population lived in extreme poverty and in no country was life expectancy over 40 – most of the progress we've made since then has been driven by productivity growth and deflationary power of technology,” says Grinda, whose firm has made over 100 exits from angel investments.“Technology has made almost everything cheaper as a percentage of peoples’ income, from food to medicine, communications, travel, etcetera, increasing peoples’ quality of life. These effects are still visible in our lifetimes - when I was a kid only the rich took planes or had cell phones."
“As a participant in the tech sector, I can contribute to making life cheaper and more efficient for millions, if not billions, of people and that’s very motivating.”
French businessman, ultrapreneur
According to the BNP Paribas study, one-in-five Ultrapreneurs say providing employment is instrumental to remaining career-driven and are twice as likely than other entrepreneurs to cite job creation as one of the most vital contributions they can make as a business founder.
For Grinda, job creation is less a direct concern than a happy consequence of selecting the right companies to support.
Outcomes are what matter
“Every week, we receive a hundred dossiers asking us to invest in their start-ups, so I interact with scores of young entrepreneurs who have great ideas,” says Grinda, who founded U.S. wireless media company Zingy Inc, selling it for $80 million in 2004.“It's fun and intellectually stimulating to be participating in building that ecosystem.”
The BNP Paribas report found Ultrapreneurs hold a greater proportion of their wealth in investment vehicles aimed at making a positive societal impact, with 8% in socially responsible investments, 7% in philanthropic endeavours and 7% in angel investments – in total, nearly a quarter of their net worth. That compares with 18% for all respondents.
Yet Grinda urges his fellow entrepreneurs to be extra careful in ensuring these kinds of investments are achieving the positive impacts they hope for. "A flaw in the notion of ethical investing is that people think it’s the intention that matters, but that’s not necessarily true – what matters are the outcomes,” he adds.“Historically, many people have been well intentioned, but failed to have a great impact because they don't use ROI in their thinking.”