Using a large recent representative sample of the German population this paper contributes
to the entrepreneurship literature by empirically testing the hypothesis that young and small
firms are hothouses for nascent entrepreneurs. The empirical estimation takes the rare
events nature of becoming a nascent entrepreneur and the regional stratification of the
sample into account. Controlling for various individual characteristics and attitudes (sex, age,
risk aversion, presence of a role model in the family, and the width of professional
background) we illustrate both the statistical significance and the economic importance for
entrepreneurship of work experience in a firm that is both young and small.