Money is a tool, sure, but it is the Universal Tool. It can be applied toward nearly every problem in business. Can people still mess up and misuse the tool? Sure. It success a better bet if you have access the Universal Tool? Most definitely.
We can come up with counterexamples all day long, but the question is not whether an individual can succeed without much money or can fail with a ton of money -- I know people that fall into both camps as well -- the question is in aggregate does more money shift the overall curve toward success in entrepreneurship over time?
I disagree. Business is hard. People are what matter.
I started a business in my garage with $5,000. I had the right ideas, market and product. I grew it to a pretty good size, employed lots of people and sold it.
Years later, I started another business with $325,000 of my own cash. I still had the right ideas, market and product. It failed miserably. Why? I didn't know enough about the industry and lost focus. I eventually restarted it (with more money) and got it going nicely.
Money couple with the right people, product and market AT THE RIGHT TIME can light things up in a major way. Money by itself is useless. And not, money does not shift the curve towards success. That's just not a sensible conclusion.
Money does nothing other than allow you to push on the accelerator once you have a formula that is ready for success. This is how money should be used. That's why the mantra in tech circles is to test an MVP with a few thousand dollars (or less if possible). Why? Because if you throw money at something that has no engagement you'll just burn it. It doesn't shift the curve toward success. The curve already has to be shifted in that direction AND THEN you throw money at it.
That's is precisely why so many people with easy access in capital fail. They think exactly as you are proposing: If we just throw money at XYZ we improve our probability to succeed. And then they fail.
Everything you said is true but missing the point.
$5000 is a wad of cash that many, many people don't have access to.
Living on savings while building and selling a product is not an option for many more.
Money just doesn't allow for acceleration but also pays for you to get in the car to begin with.
And that's not a precise statement either: having the ability to live while earning nothing build your business -- something that often takes some amount of cash, is what can mean the difference between success and failure.
I have to take you back to the title of the article:
"Entrepreneurs don’t have a gene for risk – they come from families with money"
That is patently false in but a very small percentage of cases.
The millions of businesses launched every year overwhelmingly do NOT come from families with money. Here, "money" being understood as mid to upper class (financially speaking).
That, in general terms, was my point, lost as it might have become.
We have two groups -- entrepreneurs with money and entrepreneurs without money.
They are part of an overall group -- entrepreneurs.
Picture them as bacteria in a petri dish.
The article simply says that entrepreneurs with money tend to survive longer (by having the freedom to take the risks that allows that survival) in addition to this group entering the petri dish more often because people tend to have a pretty good understanding for their appetite for risk -- an appetite largely dependent on their built in food supply -- available cash. It is not saying that people without money cannot become entrepreneurs or are not good entrepreneurs, just that the petri dish population tends to be covered more by those species that have advantages than those that don't.
We can come up with counterexamples all day long, but the question is not whether an individual can succeed without much money or can fail with a ton of money -- I know people that fall into both camps as well -- the question is in aggregate does more money shift the overall curve toward success in entrepreneurship over time?
I'd bet big that it does.