scholarly journals The early growth of start-ups: innovation matters. Evidence from Italy

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Raffaele Fiorentino ◽  
Sergio Longobardi ◽  
Alessandro Scaletti
Keyword(s):  
Propensity Score ◽  
Propensity Score Matching ◽  
Firm Growth ◽  
Ad Hoc ◽  
Early Stage ◽  
New Ventures ◽  
Objective Measure ◽  
Content Type ◽  
Start Up ◽  
Start Ups

PurposeDespite the relevance of innovation in entrepreneurship literature, empirical research on the innovation-performance relationship in start-ups is underdeveloped and shows controversial results. To bridge this gap, the aim of this paper is to investigate the role of innovativeness on new venture performance in the early stage of the life cycle.Design/methodology/approachRegression modelling and propensity score matching are used to reveal systematic differences in growth between innovative start-ups (ISUPs) and non-innovative start-ups. We use an ad hoc dataset obtained through merging the financial database AIDA with data from administrative sources (Italian Chambers of Commerce and the Italian Ministry for Economic Development).FindingsThe results show that differences in growth can be explained by the different levels of innovativeness in new ventures. Moreover, unlike in prior studies, the innovation inputs matter more than innovation outputs. Indeed, the results support the idea that innovation policies can contribute to maximising the potential of start-ups.Practical implicationsThe findings provide suggestions for policy makers and entrepreneurs to help firms configure ex ante appropriate actions to support the growth of new ventures in the start-up stage.Originality/valueThis study is the first to use the new objective measure of start-up innovation, available from the Italian LD 221 register. Second, different types of innovation are investigated as antecedents of firm growth. Third, we employ propensity score matching, which favours revealing systematic differences in growth between ISUPs and non-innovative start-ups. Fourth, the results of our study are the first to offer evidence on the effectiveness of the new Italian sustaining ISUPs policy.

Journey's end: a dynamic framework of entrepreneurial processes and capitals relating to early stage business exit

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Richard Hanage ◽  
Pekka Stenholm ◽  
Jonathan M. Scott ◽  
Mark A.P. Davies
Keyword(s):  
Case Studies ◽  
Early Stage ◽  
Theory Building ◽  
Cross Sectional ◽  
Content Type ◽  
Dynamic Framework ◽  
Longitudinal Dynamic ◽  
Start Up ◽  
New Business ◽  
Start Ups

PurposeThe purpose of this paper is to respond to the call by McMullen and Dimov (2013) for a clearer understanding of entrepreneurial journeys by investigating the entrepreneurial capitals and micro-processes of seven young early stage entrepreneurs who all exited their businesses within 3 years of start-up.Design/methodology/approachThe authors analysed empirical data from concurrent in-depth interviews which generated rich longitudinal case studies. Theory-building then led to a proposed “Longitudinal Dynamic Process Framework” of entrepreneurial goals, processes and capitals.FindingsThe framework builds on prior studies by integrating entrepreneurial processes and decisions into two feedback loops based on continuous review and learning. It thereby enhances understanding of the dynamics of new business development and unfolds the early stage ventures entrepreneurs' business exits.Research limitations/implicationsThe findings are based on a small purposive sample. However, the main implication for research and theory is showing how the entrepreneurial capitals are dynamic and influenced by entrepreneurs' environment, and also separating entrepreneurs' personal issues from their business issues.Practical implicationsThe findings challenge some assumptions of policymakers and offer new insights for practitioners and early stage entrepreneurs. These include having more realistic case-studies of the entrepreneurial journey, recognizing the need to be agile and tenacious to cope with challenges, understanding how capitals can interact in complementary ways and that entrepreneurial processes can be used to leverage them at appropriate stages of the start-ups.Originality/valueThe concurrent longitudinal analysis and theory-building complements extant cross-sectional studies by identifying and analysing the detailed processes of actual business start-ups and exits. The proposed framework thereby adds coherence to earlier studies and helps to explain early stage entrepreneurial development, transformation of capitals and business exit.

What does a start-up need to grow? An empirical approach for Italian innovative start-ups

2019 ◽  
Vol 25 (2) ◽  
pp. 376-393 ◽  
Author(s):  
Niccolò Innocenti ◽  
Vincenzo Zampi
Keyword(s):  
Early Stage ◽  
Empirical Approach ◽  
Strategic Choices ◽  
Content Type ◽  
Public Investments ◽  
Start Up ◽  
Italian Provinces ◽  
Start Ups ◽  
D Investment ◽  
External Characteristics

PurposeThe purpose of this paper is to capture the role of internal and external characteristics in favouring the growth of innovative start-ups at an early stage of their life.Design/methodology/approachThe empirical approach of this paper is based on an econometric analysis applied to all Italian innovative start-ups with four and five years of life. Growth is analysed after four and five years from the constitution, depending on internal investments in research and development (R&D), in tangible assets and on characteristics external to the firm (110 Italian provinces) related to industrial variety, specialisation, public investments in R&D, etc.FindingsThe results achieved in this study reveal the importance of internal R&D investment even though there is missing evidence on the relevance of general and government specific R&D investment in the area. Other interesting results concern the importance of the firm’s involvement in the technological specialisation of the area and the need for general variety in technological diversification in the area to favour the growth of start-ups.Practical implicationsThe results imply that entrepreneurs should evaluate carefully their strategic choices in terms of the location of the start-up and the investment in R&D as these could be important factors for the firm’s growth.Originality/valueThis paper is an original attempt to measure the importance of both internal and external characteristics for the growth of start-ups. Moreover, the analysis covers the overall population of a new interesting category of firm, the innovative start-up.

When startups exit: comparing strategies in Europe and the USA

2018 ◽  
Vol 39 (3) ◽  
pp. 26-33 ◽  
Author(s):  
Alessia Pisoni ◽  
Alberto Onetti
Keyword(s):  
Early Stage ◽  
High Growth ◽  
High Tech ◽  
Venture Capitalists ◽  
Content Type ◽  
Early Exit ◽  
Start Up ◽  
The Usa ◽  
Local Companies ◽  
Start Ups

Purpose The purpose of this paper is to present an overview of trends toward start-up exits. Exits represent the “end phase” of the start-up process, at least for the founders and the early investors. For high-growth venture-capital-backed companies, exits are often considered the ultimate goal of building a profitable venture. These ventures are intended from the beginning to harvest the financial value created by the business at some point in the future, and return capital to early investors. Design/methodology/approach The authors tracked 5,744 merger and acquisition transactions that have occurred between European and US tech start-ups since 2012. Data are drawn from CrunchBase, the most comprehensive database of high-tech companies and investors with information on the companies and investors around the world. The authors then compared the trends of acquisitions between European and US companies. Findings Results show that US companies are far more inclined to make acquisitions than European ones. Acquirers of start-ups, both from Europe and the US, prefer to buy local companies. However, recently, US companies have started to show more interest in European start-ups. Thus, signaling that the European start-up ecosystem is growing and becoming more attractive for US buyers. Furthermore, results show that start-up exits typically happen within a few years after a company’s establishment. Research limitations/implications The research does not take into consideration the price of the transaction, or the amount of capital invested by venture capitalists in the high-tech start-ups that have been acquired. Further research should address this specific problem by helping European start-ups understand how to plan the exit phase within few years from establishment. Practical implications The results have important implications both for entrepreneurs/managers and policymakers. Early exit appears to be a global trend among start-ups. This suggests that the exit phase should be properly planned to happen in the very early stage of the start-up process. On the other hand, the research also shows that there is still a gap to be filled in the European start-up ecosystems’ ability to produce exits and create new large innovative companies (the so-called “unicorns”). Originality/value To date, there has been a little research about exits for young high-tech ventures. This paper will attempt to shed new light on this so far under-explored issue by specifically analyzing exits as financial strategy for investors and entrepreneurs.

Entrepreneurial cognition and premature scaling of startups: a qualitative analysis of determinants of start-up failures

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
George C. Joseph ◽  
Nimitha Aboobaker ◽  
Zakkariya K.A.
Keyword(s):  
Decision Making ◽  
Cognitive Biases ◽  
Early Stage ◽  
Self Regulation ◽  
Behavioral Patterns ◽  
Content Type ◽  
Attitude Theory ◽  
Start Up ◽  
Entrepreneurial Cognition ◽  
Start Ups

Purpose This study aims to explore the behavioral patterns of entrepreneurs, their cognitive styles and personality characteristics that can lead to a self-destructive chain of events during the transition from a fledgling business to one capable of long-term, profitable growth. This study adopts the self-regulation attitude theory to uncover the reasons for premature start-up scaling, which will help founders to study on their cognitive biases, emotions and behaviors and make efforts to do what does not come naturally to them. Design/methodology/approach The respondents for this qualitative study were selected from a group of entrepreneurs with extensive experience with technology start-ups that have either failed or succeeded during their development stages. In-depth semi-structured interviews were conducted with eight participants, who were selected through snowball sampling, on the theme of understanding “How do premature scaling mistakes happen?”. Thematic analysis was used to unearth common themes. Findings The results of this study identified the following themes, “comparison,” “emotional over-reaction,” “impatience,” “mistaken customer priorities,” “overestimation” and “overconfidence,” which eventually leads to premature scaling. The underlying decision-making heuristics of entrepreneurs can be identified as engulfed in different cognitive biases and emotions resulting in negative behavioral patterns, as in the case of premature scaling. Of the six themes, “comparison,” “mistaken customer priorities,” “overestimation” and “overconfidence relates to cognitive bias” and “emotional over-reaction” and “impatience” relate to emotional factors. Research limitations/implications The study was made possible with the support of the voluntary participants chosen by purposive and snowballing data sampling. The interviewee and interviewer biases could have also crept in as part of this qualitative approach. The study pertains only to start-ups in the information technology sector and further studies need to be done to generalize the results across industries as well. Practical implications This early-stage underestimation of unexpected obstacles in the entrepreneurship journey necessitates a focus on the entrepreneur too, as much as the concept. In these hectic and fast-paced circumstances, aspiring entrepreneurs must be taught how to deal objectively with themselves and others, as well as think strategically. Leaders who scale do so because they take purposeful measures to overcome their weaknesses through self-discipline, soliciting advice from others and using their right to change their attitude and points of view. Originality/value The study frames the new approach into the entrepreneurial literature, linking it to self-regulation attitude theory and adds to the nascent literature on neuroentrepreneurship which discuss entrepreneurial cognition, decision-making, and entrepreneurial behavior. This study attempted to explore the reasons behind the premature scaling of startups on an individual level. This study is pioneering in exploring the cognitive factors underlying an entrepreneur’s decision that results in premature scaling. This study provides insights for academicians, entrepreneurs and policymakers and helps understand the cognitive journey that leads to premature scaling.

scholarly journals Understanding the accelerator from resources-based perspective

2018 ◽  
Vol 12 (3) ◽  
pp. 258-278 ◽  
Author(s):  
Chul Hyun Uhm ◽  
Chang Soo Sung ◽  
Joo Yeon Park
Keyword(s):  
Early Stage ◽  
Point Of View ◽  
Success Rates ◽  
Access To Resources ◽  
Content Type ◽  
Study Approach ◽  
Start Up ◽  
The Usa ◽  
Start Ups

Purpose This study aims to explore Accelerators and their practices in sustaining start-ups within their innovative programs for these companies based on the resource-based perspective. Moreover, with an ever-increasing demand for Accelerators amongst start-up companies, this study also demonstrates the importance of Accelerators, as it pertains to new venture creation. Design/methodology/approach This research uses an exploratory case study approach to examine a comparative view of leading Accelerator companies in the USA and Korea based on resource support. Findings The results of this study show that there are a number of differences between Accelerators of the two countries in terms of the resources they support for early-stage start-ups. The findings also show some similarities. However, in Korea, the Accelerator landscape is limited, where mentorship, resources and investments are not readily accessible, resulting in low success rates for Korean start-up companies. These limitations have had a negative trickle-down effect when providing entrepreneurs with strong access to resources and investors, which highly affects the success rates of early-stage start-ups. Practical implications In terms of the resource-based theory, this study contributes to the growth of early start-ups by emphasizing the role of the accelerator and suggesting the extent and impact that entrepreneurs have access to resources and investors. Originality/value With significant growth in start-ups around the world, the necessity for start-up funding and mentorship has increased drastically. Start-up companies need various types of assets, systems, knowledge and information to achieve their goals. In Accelerators, start-ups receive all the aforementioned resources while also improving their entrepreneurial skills. Start-up companies have many options in seeking investors who support both tangible and intangible resources to boost growth. While there is a wealth of information on traditional funding methods, there are few studies that shed light on the role of Accelerators from the resource-based point of view.

How do social skills enable nascent entrepreneurs to enact perseverance strategies in the face of challenges? A comparative case study of success and failure

2014 ◽  
Vol 20 (6) ◽  
pp. 517-541 ◽  
Author(s):  
Wadid Lamine ◽  
Sarfraz Mian ◽  
Alain Fayolle
Keyword(s):  
Social Skills ◽  
New Technology ◽  
New Ventures ◽  
Nascent Entrepreneurs ◽  
Entrepreneurial Process ◽  
Ongoing Research ◽  
Content Type ◽  
Start Up ◽  
The Impact

Purpose – This paper seeks to advance ongoing research in entrepreneurial perseverance. While the concept of perseverance is not new, few researchers paid attention to behavioural persistence in the entrepreneurial context. The purpose of this paper is to explore the emergence of new technology based firms (NTBF) by focusing on the role of nascent entrepreneurs’ social skills in the meeting the changes of entrepreneurial perseverance. Design/methodology/approach – In this paper the authors study the start-up phase of entrepreneurial process. The authors opted for a longitudinal case study approach in order to enhance the knowledge on entrepreneurs’ social skills and perseverance. For triangulation purpose the data were gathered using four different information sources. The use of Nvivo8 as the data analysis tool helped to impose a discipline and structure which facilitated the extraction of core insights. Findings – This paper contributes to the understanding of the entrepreneurial perseverance in the context of new venture creation. Particularly, reading the entrepreneurial process through the lens of the perseverance strategies model (Van Gelderen, 2012) provided a way to identify and then to assess the impact of the social skills on the overall entrepreneurial perseverance and their combined impact on the performance of NTBF creation process. In doing so, the authors identify the impact of entrepreneurs’ social skills to deal with a series of entrepreneurial problems such as scarcity of resources, uncertainty and ambiguity and consequently their impact on the likelihood of survival for new ventures. The issues that arose mostly reflected the inherent complexity of technology transfer processes, the university and entrepreneurs’ diverging cultures, and the very characteristics of the start-up phase of NTBFs. The findings reveal how social skills impact the entrepreneurial paths and probable outcomes. Research limitations/implications – This paper contributes to the understanding of the entrepreneurial perseverance in the context of NTBF creation. The findings reveal how social skills and perseverance impact the entrepreneurial paths and probable outcomes. Practical implications – The paper has implications for entrepreneurial support mechanisms such as technology business incubators in helping them to improve the efficacy and efficiency of their assistance to entrepreneurs through the development of their skill-sets and perseverance and providing enabling networking. In addition, the research has implications for entrepreneurship education and training. Indeed, there is an urgent need to design and implement courses and programs aiming at developing soft skills in entrepreneurship. Originality/value – In exploring networking and issues of perseverance for nascent entrepreneurs operating in new technology-based sectors, which the authors consider as an under searched area in entrepreneurial literature.

Antecedents of growth-oriented entrepreneurship before and during the Greek economic crisis

2017 ◽  
Vol 24 (3) ◽  
pp. 528-544 ◽  
Author(s):  
Ioannis Giotopoulos ◽  
Alexandra Kontolaimou ◽  
Aggelos Tsakanikas
Keyword(s):  
Work Experience ◽  
Early Stage ◽  
New Ventures ◽  
High Growth ◽  
Content Type ◽  
Crisis Period ◽  
Individual Level ◽  
Level Data ◽  
The Social ◽  
Before And After

Purpose The purpose of this paper is to explore potential drivers of high-growth intentions of early-stage entrepreneurs in Greece before and after the onset of the financial crisis of 2008. Design/methodology/approach To this end, the authors use individual-level data retrieved from Global Entrepreneurship Monitor annual surveys (2003-2015). Findings The results show that high-growth intentions of Greek entrepreneurs are driven by different factors in the crisis compared to the non-crisis period. Male entrepreneurs and entrepreneurs with significant work experience seem to be more likely to be engaged in growth-oriented new ventures during the crisis period. The same appears to hold for entrepreneurs who are motivated by an opportunity and also perceive future business opportunities in adverse economic conditions. On the other hand, the educational level and the social contacts of founders with other entrepreneurs are found to drive ambitious Greek entrepreneurship in the years before the crisis, while they were insignificant after the crisis outbreak. Originality/value Based on the concept of ambitious entrepreneurship, this study contributes to the literature by investigating the determinants of entrepreneurial high-growth expectations in the Greek context emphasizing the crisis period in comparison to the pre-crisis years.

Student entrepreneurship ecosystems at Australian higher education institutions

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Alex Maritz ◽  
Quan Nguyen ◽  
Sergey Ivanov
Keyword(s):  
Higher Education ◽  
Higher Education Institutions ◽  
Entrepreneurship Education ◽  
University Student ◽  
Content Type ◽  
Student Entrepreneurship ◽  
Start Up ◽  
Entrepreneurship Ecosystems ◽  
Start Ups ◽  
The Impact

PurposeDespite the significance, university student start-ups and student entrepreneurship ecosystems (SEEs) have been subject to little research. This study aims to apply a qualitative emergent enquiry approach to explore best practice SEEs in Australia, complimented by narratives from leading scholars in higher education institutions with the aim of delineating the integrative components of SEEs.Design/methodology/approachAdopting the entrepreneurial ecosystem framework and aligned to the social cognitive theory, this paper explores the components and dynamics of SEEs, contributing to an understanding of how such components can better support the growth, sustainability and success of student start-ups. The authors extend entrepreneurship research on social construction using narrative research.FindingsThe findings provide guidelines for researchers, entrepreneurship scholars and educators, entrepreneurship students, policymakers and practitioners to enhance the impact and success of university student start-ups by adopting a student ecosystem approach.Research limitations/implicationsThe narratives represent a limited number of universities with an opportunity for further research to empirically measure the impact and outcomes of SEEs. The research is exploratory, inherently conceptual and emergent, providing an opportunity for validation of narrative frameworks in future studies.Practical implicationsThe findings may assist university managers to be more aware of their own subconscious preferences to student entrepreneurship and start-up initiatives, which may be useful in refining their impact and offerings regarding a quest toward the entrepreneurial university.Social implicationsFrom social perspectives, the alignment of the components of SEE has the ability to enhance and shift the entrepreneurial mindset of entrepreneurship students, notwithstanding enhancement of intentionality and self-efficacy.Originality/valueThis is the first study of SEEs in Australia, highlighting the importance of the integration of entrepreneurship education programs, entrepreneurship education ecosystems, the entrepreneurial university and specific start-up initiatives such as university accelerators. Furthermore, students may enhance their entrepreneurial mindset by actively engaging in such ecosystems.

Drivers for voluntary intellectual capital reporting based on agency theory

2019 ◽  
Vol 20 (2) ◽  
pp. 264-281 ◽  
Author(s):  
Viktoria Goebel
Keyword(s):  
Propensity Score ◽  
Agency Theory ◽  
Propensity Score Matching ◽  
Intellectual Capital ◽  
Integrated Reporting ◽  
Content Type ◽  
The Relationship ◽  
Practical Implications ◽  
Management Report

PurposeThe purpose of this paper is to investigate the drivers for voluntary intellectual capital (IC) reporting based on agency theory. This study responds to calls for critical investigations of IC reporting utilising Goebel’s (2015a) IC measuring approach to investigate the role of IC value and mispricing for IC reporting.Design/methodology/approachA mandatory management report offers a unique research setting in Germany. The content analysis results of 428 German management reports are used in a regression analysis with leverage, ownership diffusion, IC value and mispricing. Additionally, a propensity score matching approach examines the relationship between IC reporting and IC value.FindingsThe regression results show that companies use voluntary IC reporting to encounter mispricing. IC reporting is negatively associated with leverage, whereas ownership diffusion and IC value show no significant results. The propensity score matching approach is also not significant.Research limitations/implicationsThis study contributes to strengthening and testing agency theory for IC reporting. As mispricing is identified to play an important role for IC reporting, IC research should account for mispricing.Practical implicationsThe findings suggest to reopen a discussion on the declared aims of the German management report and the international integrated reporting model to provide information on value creation, as IC value shows no link to IC reporting.Originality/valueThis study innovatively links IC reporting to IC value and mispricing to investigate drivers for voluntary IC reporting.

Credibility-Driven Entrepreneurship

2011 ◽  
Vol 12 (1) ◽  
pp. 5-15 ◽  
Author(s):  
Jakob Rehme ◽  
Peter Svensson
Keyword(s):  
New Product Development ◽  
New Ventures ◽  
Marketing Theory ◽  
Start Up ◽  
External Stakeholders ◽  
Entrepreneurship Theory ◽  
First Sale ◽  
Speed To Market ◽  
Start Ups ◽  
Business To Business

This article investigates how external stakeholders influence the first sale of technology-based business-to-business start-up companies. The authors combine entrepreneurship theory with marketing theory to describe the marketing and selling activities of start-ups and how new ventures reach key milestones. The study shows how two start-ups, an e-business firm and a new product development firm, acquired their first customers. The analysis provides a picture of how a network of the firms' founders, board members and owners contributed to their first sales. It also highlights the importance of sales activities, relationships and industrial knowledge. The paper examines the importance of external stakeholders' relative positions in the web of relationships and assesses how relevant these are in affecting outcomes and speed to market. The authors conclude that the first sale follows a time line with three important phases of activities involving credibility, closing and operations. They find that credibility is best obtained through establishing relationships.

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