Cooper, Arnold C
Challenges in predicting new firm performance Cooper, Arnold C. - 1993 - 241 - 253
Research examining predictors of new firm performance is clearly of interest to entrepreneurs and to those who provide advice and funds for their ventures. A growing body of research has examined the influence upon performance of such variables as entrepreneurs' characteristics, processes of founding, venture attributes, and environmental characteristics. However, considered as a whole, this research has shown mixed results and limited findings to date. This paper considers some of the challenges that arise in attempting to predict new firm performance. A key factor is the heavy dependence of new ventures upon environmental developments, many of which may be very difficult to predict. All firms are impacted by the environment, but new ventures have a concentration of risk upon a few products or services, narrow markets, and a few key resources. Thus, well-conceived ventures can fail because of unforeseen environmental shocks and the lack of deep pockets to ride out hard times. These same factors can cause new firm performance to swing widely, confounding attempts to identify predictors of good or poor performance. There are also challenges because many entrepreneurs...
Challenges in predicting new firm performance Cooper, Arnold C. - 1993 - 241 - 253
Research examining predictors of new firm performance is clearly of interest to entrepreneurs and to those who provide advice and funds for their ventures. A growing body of research has examined the influence upon performance of such variables as entrepreneurs' characteristics, processes of founding, venture attributes, and environmental characteristics. However, considered as a whole, this research has shown mixed results and limited findings to date. This paper considers some of the challenges that arise in attempting to predict new firm performance. A key factor is the heavy dependence of new ventures upon environmental developments, many of which may be very difficult to predict. All firms are impacted by the environment, but new ventures have a concentration of risk upon a few products or services, narrow markets, and a few key resources. Thus, well-conceived ventures can fail because of unforeseen environmental shocks and the lack of deep pockets to ride out hard times. These same factors can cause new firm performance to swing widely, confounding attempts to identify predictors of good or poor performance. There are also challenges because many entrepreneurs...