Number of employees | Number of employees | ||||
Binary variables for construction, manufacturing, ICT wholesale and retail | North American Industry Classification System (NAICS) | NAICS | |||
Owner's work experience (in years) in the same industry | The number of years of the owner's work experience in the same industry | Percentage of owners: with 2–9 years of experience; with 10–19 years of experience; with at least 20 years of work experience | Work experience (in years) | ||
Three binary variables: (1) graduated from high school, (2) college education and (3) university graduate | Variable in the range from 1 to 10, where 1 means less than 9 years of education, and 10 represents education with a doctorate | Three variables - the percentage of owners who graduated from: (1) secondary schools; (2) colleges; (3) have not graduated from college | |||
Binary variable = 1 when the company has more than one owner | Binary variable = 1 when the company has more than one owner | Number of owners |
Survival | 4,928 | 0.81 | 0.39 | 0 | 1 |
Number of owners | 4,928 | 1.39 | 0.72 | 1 | 10 |
Employment | 4,823 | 1.68 | 3.83 | 0 | 25 |
Work experience | 4,665 | 12.42 | 10.40 | 0 | 40 |
External own equity | 4,928 | 0.06 | 0.24 | 0 | 1 |
External debt | 4,928 | 0.43 | 0.49 | 0 | 1 |
Initial capital | 4,908 | 4.26 | 2.79 | 0 | 9 |
Total debt | 4,919 | 2.99 | 3.15 | 0 | 9 |
Competitive advantage | 4,858 | 0.65 | 0.48 | 0 | 1 |
Intellectual property | 4,928 | 0.22 | 0.41 | 0 | 1 |
Overall debt ratio | Foreign capital to total assets ratio | Negative | |
Initial capital amount (total finance) | Log of total capital in the first accounting year | Positive | |
Initial own capital | Log of own equity in the first accounting year | No impact | |
Initial capital ratio | Own equity to total equity in the first accounting year. | Negative | |
Loan | = 1 if the owner took out a commercial loan, in p.p. | Negative | |
Other sources of capital | = 1 if the loan came from sources such as: family, spouse, former owner, in p.p. | Positive | |
capital value 1 | = 1 if the equity of all owners was between $10,000 and $25,000, in p.p. | Positive | |
capital value 2 | = 1 if the equity of all owners was at least $25,000, p.p. | Positive | |
Formal funds | Capital raised from all types of market financing sources, such as banks and venture capital. | Positive | |
Formal debt | Financing obtained from lending institutions such as banks, non-bank financial intermediaries and the government | Positive | |
Formal capital | Equity investments from venture capitalists (VCs) and business angels consisting mainly of formal capital | Negative | |
Overall debt ratio | Foreign capital to total assets ratio | Negative | |
Start-up capital | Total amount of capital in the first year from the launch (in euros) | Positive |
1- The company survived on the market | 922 | 19 |
0- Otherwise | 4,006 | 81 |
0- No equity financing | 991 | 20 |
1- Equity does not exceed $500 | 181 | 4 |
2- Equity in the range between $501 and $1,000 | 229 | 5 |
3- Equity in the range between $1,001 and $3,000 | 422 | 9 |
4- Equity in the range between $3,001 and $5,000 | 419 | 9 |
5- Equity in the range between $5,001 and $10,000 | 599 | 12 |
6- Equity in the range between $10,001 and $25,000 | 701 | 14 |
7- Equity in the range between $25,001 and $100,000 | 890 | 18 |
8- Equity in the range between $100,001 and $1,000,000 | 411 | 8 |
9- Equity higher than $ 1 million | 65 | 1 |
1- If the start-up is financed with external equity | 4,630 | 94 |
0- Otherwise | 298 | 6 |
0- No debt financing | 2,231 | 45 |
1- Debt does not exceed $500 | 152 | 3 |
2- Debt in the range between $501 and $1,000 | 127 | 3 |
3- Debt in the range between $1,001 and $3,000 | 321 | 7 |
4- Debt in the range between $3,001 and $5,000 | 241 | 5 |
5- Debt in the range between $5,001 and $10,000 | 342 | 7 |
6- Debt in the range between $10,001 and $25,000 | 422 | 9 |
7- Debt in the range between $25,001 and $100,000 | 582 | 12 |
8- Debt in the range between $100,001 and $1,000,000 | 435 | 9 |
9- Debt higher than $ 1 million | 66 | 1 |
1- If the start-up is financed with external debt | 2,823 | 57 |
0- Otherwise | 2,105 | 43 |
1. Survival | 1 | |||||||||
2. Number of owners | 0.05 | 1 | ||||||||
3. Employment | 0.05 | 0.21 | 1 | |||||||
4. Work experience | 0.06 | −0.04 | 0.02 | 1 | ||||||
5. External own capital | 0.01 | 0.17 | 0.18 | 0.01 | 1 | |||||
6. External debt | 0.04 | 0.08 | 0.20 | 0.00 | 0.07 | 1 | ||||
7. Initial own capital | 0.02 | 0.19 | 0.21 | 0.00 | 0.23 | 0.19 | 1 | |||
8. Total debt | 0.02 | 0.07 | 0.25 | −0.05 | 0.11 | 0.54 | 0.26 | 1 | ||
9. Competitive advantage | 0.04 | 0.06 | 0.10 | 0.03 | 0.04 | 0.06 | 0.13 | 0.07 | 1 | |
10. Intellectual property | 0.03 | 0.12 | 0.11 | −0.02 | 0.10 | 0.01 | 0.10 | 0.02 | 0.14 | 1 |
1 | 3,445 | 70 |
2 | 1,168 | 24 |
3 | 219 | 4 |
4 | 73 | 1 |
5 | 10 | 0 |
6 | 6 | 0 |
7 | 5 | 0 |
10 | 2 | 0 |
1- the company has a competitive advantage | 1,719 | 35 |
0 - otherwise | 3,139 | 64 |
1- if the start-up has proprietary rights | 3,859 | 78 |
0 - otherwise | 1,069 | 22 |
Probability of start-up company bankruptcy | The hazard model | |
Probability of start-up company bankruptcy | The hazard model | |
Probability of company bankruptcy of at the end of the year | The hazard model | |
Firm survival - a binary variable indicating whether the company stayed in business in 2007, i.e., three years after its launch | Probit | |
Firm survival that takes the value of 1, if one of the original owners-founders remained the owner for 4 years, or if the company is still in business after 4 years, but in the hands of the new owners, otherwise 0 | Probit | |
Firm survival - binary variable equal to 1 if the company is in business (survived) and equal to 0 if it is out of business (dropped out of the market) in 2004, 2005, 2006, 2007, respectively | Probit | |
Firm survival - a binary variable that takes the value of 1 if the start-up did go out of business by 2007, and 0 otherwise | Logit |
External own equity | −0.019 (0.19) | ||
External debt (H1) | 0.193 | 0.158 | 0.024 |
Total equity | −0.003 (0.02) | ||
Total debt | −0.009 (0.02) | ||
Number of owners | 0.148 | 0.145 | 0.022 |
Employment | 0.029 | 0.028 | 0.004 |
Professional experience (H2) | 0.015 | 0.015 | 0.002 |
Competitive advantage (H3) | 0.153 (0.08) | 0.158 | 0.024 |
Intellectual property (H4) | 0.130 | 0.131 | 0.019 |
Constant | 0.853 | 0.835 | |
N number of observations | 4,490 | 4,506 | 4,506 |
LR statistic | 47.46 | 47.59 | 47.59 |