National Survey of Military Affiliated Entrepreneurs: 2020 Key Highlights

The IVMF National Survey of Military Affiliated Entrepreneurs monitors trends in the activity, needs, and economic, social, and policy barriers of military-affiliated entrepreneurs in the United States. In its inaugural year, the intent was to draw from a cross-sectional sample of over 2,500 veteran entrepreneurs. Future surveys will also track trends and pressing issues. For example, in 2020 the survey was updated to focus on such COVID-19. All NSMAE surveys and forthcoming public datasets will be an enduring source of current insights for public and private sector leaders, policymakers, and community-based organization on systemic barriers to and drivers of entrepreneurial success among veterans and their family members.

Motivations for Entreprenuership

Top 5 Reasons Veterans Start a Business

Make my own decisions.

Chance to implement own ideas/creating something.

Opportunity to be financially independent/increase.
personal income.

Maintain personal freedom.

Helping society/supporting community. 

94% do not give up easily even in the face of difficulties.

Barriers to Entrepreneurship

Top Problems or Barriers in Pursuing or Achieving Business Goals

Lack of initial capital

42%

Problems finding good employees/contracted personnel

29%

Irregular income

24%

Current economic situation

23%

Lack of experience in entrepreneurship or business ownership

20%

Lack of mentors

22%

Financial Related Barriers

A) 66% reported difficulty with applying for grants from nonprofit organizations

B) 53% reported difficulty with applying for loans

C) 49% reported difficulty with identifying sources of funding to start the business

D) 34% were turned down by lender or creditor when applying for financing

 

(A)

(B)

(C)

(D)

0%

100%

Regulation Barriers

0 %
Reported that the certification process is difficult
0 %
Reported difficulty obtaining the necessary licenses to operate business
0 %
Reported difficulty registering your company with e-verify

Major Factors that Impact Starting a Business

People and Social Capital

  • 40% Lacked formal help to start a business
  • 32% Lacked experience or exposure to someone who has run a business

Capital

  • 33% Couldn’t afford long-term capital
  • 27% Couldn’t afford start-up costs

Experience/Knowledge

  • 27% Didn’t know practical details to start a firm
  • 23% Didn’t know the legalities of starting business

What does entrepreneurship success look like to you?  

“For me, entrepreneurial success looks like improved lifestyle for myself and others: contributing to the improvement of public policies to the gain of my community, and helping my community grow and prosper, all while achieving financial freedom for myself and my family”

Navy Veteran Entrepreneur, Consultant, CEO and Business Owner Professional, Scientific, and Technical Services Industry

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Capital

Sources of Capital

72% needed capital to start/grow their business.
Top three Sources of Capital used in 2019 are:
Personal/family savings of the owner (63%)
Business credit card (38%)
Personal credit cards (35%)

Capital for Different Stages: Startup

0 %
In 2019, 59% needed less than $25,000 to start or acquire their business while 54% needed more than $25,000 to grow their business
0 %
In 2019, 60% of startup entrepreneurs were able to secure the initial funding for starting or acquiring a business while 41% of established entrepreneurs were able to secure the funding needed to grow their business.
0 %
In 2019, 25% of startup owners and 31% of established business owners were not able to secure any funding at all

Capital for Different Stages: Growth

0 %
54% needed more than $25,000 to grow their business
0 %
41% were able to secure the funding needed to grow the business in 2019 while 31% were not able to secure any funding at all
0 %
27% does not feel prepared for the traditional lending process

Credit Card

0 %
43% of business debt is on credit cards
0 %
66% pay an interest rate that is higher than 10%
0 %
19% pay an interest rate between 20-29.99%

What does entrepreneurship success look like to you?  

“Entrepreneurial success allows an individual to enjoy the fruits of their labor.  You decide what the top-down message is, what the corporate culture will be, you decide what the expectations should be for your business and employees, and you get the ability to implement the skills and lessons learned from former bosses that were good leaders.  It means you no longer have to deal with bad bosses or unmotivated employees, and you get to set the tone and lead by example.  Success validates the entrepreneur's vision and leadership.  Simply put, success is freedom”

Air Force Veteran Vetrepreneur, Business Owner, and Consultant & Team Leader Professional, Scientific, and Technical Services Industry

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Support and Resources for Entrepreneurship

70% of veteran entrepreneurs had support from friends and family to start their business

20% of veteran entrepreneurs do not feel supported by their local communities

46% of veteran entrepreneurs indicated that navigating the resources in their local community was not easy

Limited Resource Awareness

0 %
44% did not know about resources for grants in their local area
0 %
52% did not know about Community Development Financial Institutions (CDFIs) in their local area
0 %
36% did not know about local incubators and accelerators in their local area

Resources in Communities

Financial Resources

59% indicate grant resources need improvement, 32% indicate this resource is sufficient, and 19% indicate this resource is outstanding

43% indicate CDFI resources need improvement, 44% indicate this resource is sufficient, and 14% indicate this resource is outstanding

Educational Resources

34% indicate local incubators and accelerators need improvement, 41% indicate this resource is sufficient, and 25% indicate this resource is outstanding

16% indicate local colleges and universities need improvement, 47% indicate this resource is sufficient, and 37% indicate this resource is outstanding

Networks and Membership Organizations

37% indicate networking resources for VBOs need improvement, 40% indicate this resource is sufficient, and 23% indicate this resource is outstanding

32% indicate local VSOs need improvement, 42% indicate this resource is sufficient, and 26% indicate this resource is outstanding

What does entrepreneurship success look like to you?  

“For me, entrepreneurial success is having a business, with a global footprint, that provides employment opportunities for those who are qualified and passionate, but unable to acquire meaningful employment”

Army Veteran Entrepreneur, Consultant, and Chief Executive Officer (CEO) Professional, Scientific, and Technical Services Industry

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COVID-19 Pandemic

  • 65% of veteran entrepreneurs indicate that their military experience has moderately or extremely prepared them for their business challenges associated with COVID-19 pandemic
  • 76% of veteran entrepreneurs indicate that they lost business due to the pandemic
  • 68% indicate that they do not anticipate closing their business
  • 31% anticipate closing their business
  • 1% already closed their business
  • 13% can operate for less than 3 months
  • 47% can operate between 6-12 months
  • 40% can operate more than a year
  • 37% were general funding (financing, loans, grants) 
  • 28% were government contracting assistance 
  • 25% were day-to-day operations 
  • 20% were emergency funding 
  • 16% involved assistance with adjusting marketing efforts 
  • 53% were approved and received funding
  • 4% approved, waiting for funding
  • 6% applied, pending approval
  • 12% eligible, have not applied yet
  • 5% turned down
  • 24% were approved and received funding
  • 8% approved, waiting for funding
  • 12% eligible, have not applied yet
  • 5% turned down
  • 31% not sure about eligibility
  • 56% believe that their business has been supported by the federal government during the pandemic
  • 60% believe that their business has NOT been supported by local government

What does entrepreneurship success look like to you?  

"Success is being in a position of mentorship to other new business owners or entrepreneurs”

Marine Corps Veteran Entrepreneur, CEO, and Business Owner Professional, Scientific, and Technical Services Industry

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