High School Friends May Decide Who Becomes an Entrepreneur

Applications to Futurpreneur, Canada's national lender to young entrepreneurs, rose 50 percent last quarter — more than triple the 15 percent growth recorded a year earlier — yet new research suggests the entrepreneurial impulse forms long before any 18-year-old walks through a program's door.

A recent study led by Seok-Woo Kwon, published in the Journal of Business Venturing, found that the friends people make in high school are associated with whether they become entrepreneurs decades later. The finding challenges a core assumption behind most entrepreneurship support programs, including Futurpreneur's core startup program, which requires applicants to arrive at 18 with a business idea already in hand.

The research followed two American cohorts born roughly four decades apart: a nationally representative group surveyed in the mid-1990s and followed into participants' late 30s, and a Wisconsin cohort tracked from 1957 through age 65. Across both groups, having a teenage friend who later became self-employed was associated with a person's own business ownership decades later.

But the type of friend mattered enormously. Adolescent friends who later built formal, incorporated companies — registered businesses with a legal identity separate from their owners — predicted a person's entry into both incorporated and unincorporated self-employment. Friends who simply worked for themselves informally, as solo contractors or freelancers, predicted nothing at all. Not even entry into the same kind of informal work they were doing.

The distinction carries economic weight. Formal and informal self-employment are essentially different populations, running ventures with different ambitions and different earnings. Prior research cited in the study found that formal, growth-oriented entrepreneurship tends to produce greater economic returns.

The earnings effect ran deeper than business formation. People whose teenage friends later built incorporated companies earned more from their own ventures in midlife — even after accounting for whether they had incorporated their own businesses. Two people running similar ventures could show different earnings depending on what their teenage friends had gone on to build. Adolescent friendships, the data suggests, are associated not only with whether people enter entrepreneurship but with the scale and economic performance of the ventures they pursue.

The study raises a mechanical question: how can a friendship formed at 16 still matter at 40? One explanation is that adolescence establishes a social channel through which entrepreneurial examples keep traveling. When a former classmate registers a company, hires staff or raises capital, that achievement may reach old friends through a reunion, a mutual acquaintance or a social media post. Prior research shows people respond more strongly to information from those with meaningful social connections than from strangers. Freelance work, by contrast, tends to remain small and relatively invisible, which may explain why it left no trace in the data.

One finding complicates the social-influence story: friendships that persisted into adulthood and friendships that faded were similarly predictive. If ongoing influence explained everything, enduring ties should have mattered more, since they carry the advice, encouragement and opportunities. An alternative explanation is selection. Teenagers do not choose friends at random; adolescents who share an appetite for risk, independence or autonomy may be more likely to become friends in the first place. The data cannot fully separate the two explanations.

Either way, the window opens earlier than policymakers assume. The finding fits a broader research base: children of business owners are far more likely to become owners themselves, and evidence from adoptees suggests environment may matter roughly twice as much as genetic inheritance in explaining who becomes an entrepreneur.

The policy implications are concrete. Rather than waiting until adulthood, schools could create places where students interested in building things can find one another — school ventures, maker spaces, small cohorts. Group size may matter: the association was strongest among teenagers with relatively few close friends, suggesting a single entrepreneurial peer is particularly visible when competing social influences are scarce.

The findings also expose a measurement gap. The recent federal evaluation of youth entrepreneurship support in Canada counts loans issued and businesses launched. If entrepreneurial pathways begin taking shape in adolescence, those metrics capture only the end of a process that may have been developing for years. For a growing pipeline of young applicants — driven in part by high youth unemployment — the upstream social environment may deserve as much attention as the downstream loan book.