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Success and Risk Factors in the Pre-Startup Phase

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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.

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Authors and Affiliations

  1. Department of Management and International Business, Albany Campus Massey University, Private Bag 102, 904 North Shore MSC, Auckland, New Zealand

    Marco van Gelderen

  2. Rotterdam School of Economics, Erasmus University, EIM Business and Policy Research Zoetermeer Max Planck Institute for Research into Economic Systems Jena, PO box 1738, Rotterdam, The Netherlands

    Roy Thurik

  3. EIM Business and Policy Research, PO box 7001, 2701, AA Zoetermeer, The Netherlands

    Niels Bosma

Authors
  1. Marco van Gelderen
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  2. Roy Thurik
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  3. Niels Bosma
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Correspondence to Marco van Gelderen.

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Gelderen, M.v., Thurik, R. & Bosma, N. Success and Risk Factors in the Pre-Startup Phase. Small Bus Econ 24, 365–380 (2005). https://doi.org/10.1007/s11187-004-6994-6

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  • DOI: https://doi.org/10.1007/s11187-004-6994-6

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