2015-01-04wsj.com

Roughly 3.6% of households headed by adults younger than 30 owned stakes in private companies, according to an analysis by The Wall Street Journal of recently released Federal Reserve data from 2013. That compares with 10.6% in 1989--when the central bank began collecting standard data on Americans' incomes and net worth--and 6.1% in 2010.

The Journal's findings run counter to the widely held stereotype of 20-somethings as entrepreneurial risk-takers. The sharp decline in business ownership among young adults, even when taking into account the aging population, adds to worries about business formation heading into 2015, economists said. The number of new U.S. business establishments fell in the first quarter of 2014, according to the latest available data from the U.S. Labor Department.

It is difficult to pinpoint the precise reasons for the decline in private business ownership among young Americans. One theory is that they face more postrecession challenges raising money. Such fast-growing sectors as energy and health care likely require a significant access to credit or capital.

We can confirm the latter. There is simply no capital anywhere for non-established entrepreneurs (even if they are established, but have no formal business entity history).



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