Innovative start-ups and growth factors

The aim of this study is to explore the main factors that impact on the growth of innovative start-ups. Latest international data on the survival and growth rate of innovation-based spin-offs and start-ups states that only few of them experience sustainable development and profitable growth. This contrasts with the main recent papers and policy prescriptions that underline the benefits of innovative start-ups (new technology based firms – NTBF) and finance their creation. With this mismatch as a starting point, we tried to understand the main factors that impact on those innovative start-ups that succeed in achieving growth and, in so doing, we tried to have a better understanding of what lies behind quantitative studies. Our study considered four different cases, two spin-offs and two innovative start-ups operative for more than 4 years and showing a significant growth. We carried out a firm centered analysis through semi-structured interviews in a one-to-one format with several members of the entrepreneurial teams, with the aim of identifying a critical event that influenced their growth trend. We asked them to reconstruct the whole venture creation process, from the pre-startup stage to the growth process, and tell us how they managed it. The fist element we took into consideration was the human capital of these start-ups. We analyzed the educational background and past experiences of their founding members. We also analyzed the entrepreneurial/financial perspective and the link between NTBF growth and the venture capitalist entrance. Consistently with the literature available on this subject, we found that the critical event that changed their developing trend was represented by the entrance of VC. However, other parameters, such as team competences, and the combination of the two perspectives showed that the investor’s changes played a key role. This study may add more direct evidence to those quantitative studies by focusing on growth success factors and directly analyzing the interactions of the different variables. Moreover, it could help practitioners to identify the performing drivers of innovative companies, as well as the determinants that are tied up to better success chances.