Portuguese Startups: a success prediction model

Daniela Santos da Silva (), António Cerqueira () and Elísio Brandão ()
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Daniela Santos da Silva: FEP-UP, School of Economics and Management, University of Porto
António Cerqueira: FEP-UP, School of Economics and Management, University of Porto
Elísio Brandão: FEP-UP, School of Economics and Management, University of Porto

FEP Working Papers from Universidade do Porto, Faculdade de Economia do Porto

Abstract: This study analyses the factors that influence the success of Portuguese startups. It aims to develop a success versus failure prediction model regarding the Portuguese entrepreneurship ecosystem. Our empirical study considers four categories that influence the success: characteristics of founders, characteristics of startups, capital and external factors. The sample includes 50 startups established over the period from 2003 to 2015 in Portugal. The explanatory variables that we use are management experience, industry experience, marketing skills, age, education, parents that have their own business (characteristics of founders), capital (capital), record keeping and financial controls, planning, professional advisors, staff, partners, product or service timing (characteristics of startups) and economic timing (external factors). The empirical results show that only the founder’s characteristics and external factors have a significant influence in Portuguese startups success. Portuguese startups with young founders, less than 25 years old, and founders with less education, high school education or less, are more likely to be unsuccessful cases. However, and contrarily to the previous literature, marketing expertise is negatively correlated with the success of startups Overall, the success and failure prediction model presents an ability to accurately predict a specific Portuguese startup as success or failure of 82%.

Keywords: startup; entrepreneurship; logit model; success; failure; prediction model (search for similar items in EconPapers)
JEL-codes: L25 L26 M13 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2016-11
New Economics Papers: this item is included in nep-ent and nep-sbm
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