This paper examines the factors influencing entrepreneurial survival and the growth of entrepreneurial enterprises, focusing on the role of access to capital and the impact of liquidity constraints. The authors use data from federal individual income tax returns of individuals who received inheritances in 1982 and 1983 to analyze the decisions of sole proprietors to continue their business or transition to other forms of income. The results suggest that liquidity constraints significantly affect entrepreneurial survival and performance. Specifically, a $150,000 inheritance increases the probability of an individual continuing as a sole proprietor by 1.3 percentage points and increases the receipts of surviving enterprises by nearly 20%. The study also finds that the impact of inheritance on entrepreneurial survival is consistent across different specifications and definitions of entrepreneurship. The findings highlight the importance of capital market imperfections in shaping business outcomes.This paper examines the factors influencing entrepreneurial survival and the growth of entrepreneurial enterprises, focusing on the role of access to capital and the impact of liquidity constraints. The authors use data from federal individual income tax returns of individuals who received inheritances in 1982 and 1983 to analyze the decisions of sole proprietors to continue their business or transition to other forms of income. The results suggest that liquidity constraints significantly affect entrepreneurial survival and performance. Specifically, a $150,000 inheritance increases the probability of an individual continuing as a sole proprietor by 1.3 percentage points and increases the receipts of surviving enterprises by nearly 20%. The study also finds that the impact of inheritance on entrepreneurial survival is consistent across different specifications and definitions of entrepreneurship. The findings highlight the importance of capital market imperfections in shaping business outcomes.