Success and Risk Factors in the Pre-Startup Phase
Posted: 1 Dec 2009
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Success and Risk Factors in the Pre-Startup Phase
Date Written: 2003
Abstract
This resesarch evaluates the relative importance ofseveral categories of variables in explaining startup success. A sample of 517 nascent Dutch entrepreneurs was identified in 1998 (from data collected by the Entrepreneurial Research Consortium), and tracked for three years. W.B. Gartner's framework for new venture creation was used. Thisperspective identified four ways in which startup efforts differ: the individual's characteristics, organization created, environment surrounding the venture, and process of the new venture. Variables analyzed include ambition (high and low), experience (substantial and limited), perceived risk, time investment, exposure to guidance and advice agencies, age, creation of business plan, capital requirements, and type of business. It was found that few personal characteristics of nascent entrepreneurs are associated with startup success. Startup capital, market risk, starting a manufacturing firm, and starting full-time are important factors. Also indicated was that older people with limited ambition are less likely to be successful. For nascent entrepreneurs with limited ambition, a business planworks positively but negatively for those with high ambition. Extensive experience does little to predict success. However, use of information and guidance increases the chance of success among less experienced entrepreneurs. Part-time businesses were also found to be easier to start. (TNM)
Keywords: Entrepreneurial Research Consortium, Startup activities, Ambition, Business plans, Information services, Motivation, Entrepreneurial environment, Experience, Firm performance, Startups, Information utilization, Firm survival, Individual traits, Nascent entrepreneurs, Risk orientation
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