An entrepreneur is a person who employs other factors of production: land, capital, and labor with an aim of making profit. Human capital is one of the forms of capitals required by the entrepreneur starting any business. Human capital refers to the sum of the individual attributes, such as the personality, the education qualifications, job experiences, and the intelligence necessary to perform a specific job (Thornton, 2010). The entrepreneur can utilize human capital to increase his chances of success by employing the most suitable individuals to do the specific jobs in his/her business. Economists argue that human capital is very important for starting and running an economic activity since this is the only factor of production that has the ability to control all other factors of production. Therefore, the entrepreneur can achieve his success being sure that all the employees in his enterprise possess the high levels of education qualifications, job experience, intelligence, and human skills. This can be achieved by establishing a management team during the initial stages of establishment having the capacity to attract and retain the best talents on the market (Thornton, 2010).
When starting a business, the entrepreneur can either utilize some short-term or some long-term sources of capital. Short-term sources of capital are such the repayment period of which is less than one year, while the long-term sources of capital are such the repayment period of which is more than one year (Peavler, 2011). The examples of short-term sources of the startup capital are the short-term bank loans and some personal savings or gifts from family and friends. The examples of the long-term sources of the startup capital include long-term bank loans and the venture capital. When weighing between the sources of the long-term capital to utilize, the entrepreneur may pursue the venture capital over the commercial bank loans because venture capitalists provide the entrepreneur with some business skills, which help the entrepreneur to achieve the tremendous success in the market within the shortest time possible; such a service that is not provided by commercial banks. Besides, venture capitalists undertake the regular monitoring and the evaluation of business in order to determine its ability for making profits, thus, enabling the entrepreneur to repay the borrowed capital (Reiss, 2011). This is an advantage for the entrepreneur because he/she is able to know the capital position of his/her business at the given time.