Abstract
Why does one person actually succeed in starting a business, while a second person gives up? In order to answer this question, a sample of 517 nascent entrepreneurs (people in the process of setting up a business) was followed over a three-year period. After this period, it was established that 195 efforts were successful and that 115 startup efforts were abandoned. Our research focuses on estimating the relative importance of a variety of approaches and variables in explaining pre-startup success. These influences are organized in terms of Gartner's (Academy of Management Review 10(4), 696-706 [1985]) framework of new venture creation. This framework suggests that start-up efforts differ in terms of the characteristics of the individual(s) who start the venture, the organization that they create, the environment surrounding the new venture, and the process by which the new venture is started. Logistic regression analyses are run for the sample as a whole as well as for subgroups within the sample, namely for those with high ambition vs. low ambition and for those with substantial vs. limited experience. The results point to the importance of perceived risk of the market as a predictor of getting started vs. abandoning the startup effort.
| Original language | English |
|---|---|
| Pages (from-to) | 365-380 |
| Number of pages | 16 |
| Journal | Small Business Economics |
| Volume | 24 |
| Issue number | 4 |
| DOIs | |
| Publication status | Published - May 2005 |
Bibliographical note
Funding Information:We express our thanks to Paul Reynolds and the ERC for the design, to Mathilde Blok for assist- ing in the development of the theoretical frame-work, and to Luca Bregoli, Paul Jansen, Gaetan Laederich, Niels Plum, and Lorraine Uhlaner for suggestions. This research project was funded by the Dutch Ministry of Economic Affairs in an assignment given to EIM Zoetermeer. The research design was developed by the ERC, headed by Professor Paul Reynolds.