Capitalists and Entrepreneurs in Owner-managed Firms

Gregory Shailer is a senior lecturer in the department of comer ce at the austalian National Univeristy, Australia. Many contemporary publications in the small business arena refer to the enterprenerurial function of roles of small busines… Often they mean manager, risk bearer, or some otehr specific function. Most of the risk in small firm is borne by the party providing the cpaital, that iis the capitalist. Small firms are often highly levered and tehr is some question concerning who fulfils the role of the capitalist. where there is no structural debt such that all capital is effectively provided by the owner-manager. This paper consders the role of the capitalist and existence of enterprenuers in the context of owner-managed firms with formal debt allowing the question of who serves the capitalist function to be addressed in a reasonably narrow context. Some simple empirical observation regarding the effective transfer of capital risk are provided in this context. The general conclusion is that while nearly all owner-manager are obliged to assume the role of capitalist. only a minority will act as enterpreneru. some recommendation for future work in this area are offered.