Apparently, gold trophies are no longer for first place.

My 13-year-old daughter came home from her latest dance competition with a gold trophy. “That’s awesome honey!” I exclaimed. “Dad, gold is the worst you can get. I was trying to get a platinum,” she explained. Sure enough, the next dance competition I attended, every child went home with some type of trophy.

The idea of participation trophies is not a new debate by any means. There have been countless studies behind their effectiveness or lack thereof. Should a child feel good about giving their best effort or should they be challenged to work harder in order to win? When it comes to entrepreneurship, all evidence that I’ve seen points to the latter.

According to a 2016 report by the Kauffman Foundation, entrepreneurship in the US is near a 40-year low. The article mentions three main factors: competition, regulation and intrapreneurship. However, if we want to get to a root cause, I have personally seen declines in entrepreneurship at the youth level.

I currently serve as Program Manager for the Young Entrepreneurs Academy (YEA) in Hudson, WI. YEA is a 30-week program that teaches business and entrepreneurship to students from 6th to 12th grade. With my role comes the straightforward task of finding mentors, sponsors and students to fill our once-a-week conference (the students insisted we don’t call it a class). When I put out the original call to parents and business professionals, I received a very positive response. I started signing up sponsors and mentors, created partnerships with the local school district and college, we even had fun field trips and activities planned so the students wouldn’t get bored writing a traditional business plan. However, there was one big problem, few students to actually fill our classroom.

We ended up with five students in our first year. Five wonderful minds who developed really terrific ideas ranging from an origami gift card holder to adapted books for special needs children. Hudson Chamber President Blake Fry and I were beaming with how well the students performed and we were ready to build on last year’s momentum with an all-out marketing blitz. We spent last summer raising more funds, publishing more content, posting social media ads – basically shouting about this amazing program from the rooftops to every student we could find. We were armed with scholarship dollars and the stories from the previous year’s class. I couldn’t wait to see the fruits of our labor…five students, again.

Disheartened by the results, I turned to a trusted advisor who administers a similar program – working with college students to turn ideas into a startup. “We’ve seen the same type of response with our program,” she lamented. “The students just don’t see the benefit of taking a risk and working hard at something if they think they are going to fail. They have no grit.”

Early childhood studies, like the famed “marshmallow test” demonstrate the clear line between instant and delayed gratification. The children with grit are able to avoid the temptation of any easy payday for something great down the road. However, unlike the marshmallow experiment, participation trophies no longer give children the option to work hard at something, fail, work harder, and fail again, before ultimately succeeding. With participation trophies everybody wins something.

Make no mistake, as an entrepreneur, you are more likely to fail than succeed. A few years ago, I spoke of this message to a group of college seniors, who were attending business school. I talked about my own personal struggles of being an entrepreneur and the lessons I learned along the way. The class was engaged and asked a lot of great questions, then I turned to the group and asked how many students were planning on starting their own business someday – not a single hand was raised. I then asked how many were looking forward to a stable job in a cubicle all day – most hands went up. I remember vehemently stating, “You’re all young, go out and take a risk in life!”

Small businesses make up roughly 90% of all businesses in the US. As I look into the eyes of my new born daughter, I worry about the death of entrepreneurship and small business growth in America. If she ever gets handed a participation trophy, I’ll teach her to say “no thanks” and instead work harder so that she may truly succeed one day.