This paper, in common with many other studies of entrepreneurship, begins with the intuition that different types of new ventures exist, and that the differences existing at the time of formation will influence the course of the venture for many years. The challenge is to separate meaningful from merely cosmetic variation. This study defines two groups--small and large--based on the amount and source of outside funding, and further divides each into two groups. It examines whether the four proposed clusters identify qualities that are widely shared within a cluster, but not across clusters. It then observes which of the shared qualities is apparently related to a company's performance by longitudinally working backward from an outcome to precursor events that may be related to its initial attributes.
The study is longitudinal, covering the entire history of each company in the sample. It is exploratory; thus the sample is not large. The four groups have from eight to fifteen companies, fifty-two in all. It is a retrospective, not a real-time, study which focuses on factual, rather than interpretive data (Interpretive information, when collected retrospectively, can suffer from many inaccuracies as respondents select facts that seem to "explain" outcomes.).
Our study poses three general questions:
To what extent is the "size" of a start-up a predictor of its other attributes?
If large start-ups exhibit many similarities, do they stem from the requirements of growth, from the nature of the industries entered, from their awareness of "best entrepreneurial practices," or perhaps from the requirements of their investors?
To what extent do highly successful companies share common qualities at birth? That is, are there readily identified attributes at inception that predispose a company to rapid growth? Are these attributes the same for large and small start-ups?
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Last Updated 5/1/97 by YuBei Teng.
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