Small ventures is vital to the US economy as over 99 percent of ventures are small and they create two out of every three new jobs ( Williamson, 2000). The topic of a new venture growth and survival has emerged as an important area of interest in the last two decades. In the dynamic environment of new venture startup, growth and survival, where 40 percent of new ventures fail in the first two years of existence (Small Business Administration, 1999), Unlike established firms, new ventures face several problems to grow and survive (Gilbert, McDougall and Audretsch, 2006). New ventures face various types of liabilities starting from their size, age, and lack of resources lessens its chances of growth and survival (Cooper, Gimeno and Woo, 1991; Gimeno et al, 1997). This also leads to differences in growth rates in new ventures.
Previous research studies have linked to New venture growth and survival may depends on factors such as entrepreneurs characteristics like educational back ground (Sapienza and Grimm, 1997), industry experience (Eisenhardt and Schoonhoven,1990; Cooper, Gimeno-Gascon and Woo, 1994) and prior start up experience ( Baum et al., 2001). Keeping all these factors under one roof, considering entrepreneur characteristics is a very critical and responsible role in the new venture growth and survival and also in the economy. Resources such as financial capital and human capital (Birley, 1987; Cooper et al, 1994), are considered important factors for entrepreneur to execute their growth and survival plans, while entrepreneurs personal networks also play vital role in establishing a certain level of legitimacy for the new ventures (Ostgaard and Birley, 1996).
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In addition to the above factors (individual and firm level) the stage of the industry, growing markets, and the industry velocity also influence new venture growth and survival (Covin, Slevin and Covin, 1990; Eisenhardt and Schoonhoven, 1990). Most studies showed that neither resource such as finance & human neither capital nor strategic factors like managerial, market related, and competitive related, affected new venture growth directly. The main element of the process of new venture growth and survival is through adaptation to changing set of opportunities.
Description of the Study
This research paper describes an analysis of the new venture growth and survival. The growth and survival factors that influence the new ventures were incorporated in such a format that they are even helpful for theÂ entrepreneurs. The Study was researched onÂ selected companies and identified the key factors of their strategies to find out the success of the new venture and also the demographical factors which sustain on the entrepreneurial characteristics among the business group. This research paper has analyzedÂ whether the entrepreneurs' awareness regarding the environmental situations will also have an impact on venture growth & development of new firms.
The aim and objectives of this research paper is to provide suggestions in order to develop the knowledge among the entrepreneurs to grow their ventures and survival through enhancing the factors mentioned in the paper.
This research studies have been divided into objective, method of research, hypothesis, findings from research and conclusion. Thus, it gives clear idea about what a research study is about and how the studies helping this research study in finding out the information about new venture growth and survival.
Based on the above ideas the aim of this research is to analyze the new venture growth and survival by explaining the link between entrepreneurial characteristics and new venture growth and survival given certain contingencies: finance, operations, human resources, social networks and the marketing context.
More specifically, this research hypothesizes that in the context of new firms, growth can be achieved through opportunistic adaptation. In my research, I focused on the established ventures. Studying them gives us insights in to the factors which helps in the new venture growth and survival by using the resource based perspective.
Statement of Research Question
The factors influencing new venture growth and survival, with which we can find some significant relationships between firm based factors like organizational structure of the venture, size and age of the venture and entrepreneur personal traits, include finance, operations, human resources, and marketing. We will discuss certain factors and reasons for the new venture growth and survival factors. This research study opens doors for many future research possibilities, which will help us better understand the needs and relationships between venture growth & survival and entrepreneurs characteristics, social networks. We have ample factors and reasons for the venture growth and survival. In this research, the presenter will describe briefly the determinations of entrepreneur's characteristics and various factors influence the new venture growth and survival.
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Factors That Affect Venture Growth and Survival
In order to recognize the factors that influence the new venture growth and survival a matrix was developed, which linked the past findings and research in the new venture growth and survival. The report identifies the following key factors associated with the growth and survival of the new venture.
Firm based factors:
Size of the firm
Amount of startup capital
Internal & external financing
Access to business & supply networks
Age of firm
Individual associated factors:
Level of education
Level of industry experience
Level of startup experience
Motivation & ambition
Timing & market condition
Location & industry specific advantage
Public policies & initiatives.
As these factors are very important in examining the context of not only the growth of the ventures but also the emerging economies and are for two reasons which are like a consequential number of entrepreneurs are usually driven for the need of motivation and tend to have only limited access to the resources needed to start their venture. Secondly a number of studies have suggested that the only particular limit on the economic perspective of economy is the time and cost for doing business.
Using the current theory and research modules this paper discusses only major factors like finance, operations, human resources, and marketing that contribute in venture growth and survival. There are many other factors which will be considered as important as survival factors such as size and age of the firm, motivation & ambition, timing and location of the firm, and also environmental factors.
The paper proceeds as follows. The researcher begins with the theoretical basis of the study by developing and stating an appropriate and suitable hypothesis and discusses the data which was gathered by surveying and analyzing the venture growth and survival factors and present the results, discuss about the implications and findings
Aim of the Study
The main aim of this study is to find the factors that influence venture growth and survival and to incorporate the factors into an analytical format which can be helpful for venture growth and survival.
Objectives of the Research
The present study was undertaken with the following objectives
To analyze the factors like human capital, financial capital, operations, human resource, and marketing that is contributing to the new venture growth and survival.
To identify key factors on new venture growth and survival.
To find the influence of the identified key factors on venture growth and survival.
To develop the knowledge among the entrepreneurs how to grow their ventures through adopting the following factors
a). Human Capital
b). Organizational structure and Strategies of venture.
c). Government support programs and
The researcher is going to organize the report as follows. In Chapter 2 provides a review of the existing theoretical perspectives that have been applied to new venture growth and survival. Previous research concerning to the new venture growth and survival. This research identifies the objectives and the findings of different researchers in venture growth and survival area where by giving us new leading edge insights for the successful venture development.
Chapter 3 describes the research methodology used in order to gather the information relevant to the research problem which including factors influencing venture growth and survival. This research involves 10 different types of organizations from United States. The survey questionnaire is organized in four sections Resources (human capital & financial capital), Competencies of their organizations, Network relations and government support programs.
Chapter 3 also includes the following methodologies.
The unit of analysis consists of the entrepreneurs from different industrial background from United States. Where the data is gathered by surveying them regarding the venture growth factors.
Selection of the sample will be collected by surveying 40 people, 10 companies from different industrial background.
Then after selecting the sample the data is gathered from those organizations by surveying them through telephonic survey, Face to face survey and by mailing them the questionnaire.
After collecting the data it will be analyzed by using percentage and graphical method followed by the improvements of the study.
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Chapter 4 describes the exploratory research analysis and interpretation. Interpretations are based on the analysis of the objectives mentioned in the chapter-3
Chapter 5 is the summary of the findings. It discusses an analysis of new venture growth and survival. Strengths' and weakness of the research will be discussed along with a few particular findings that suggest ways to improve a successfully growing the new venture and survival.