Start ups survival: do business models matter?

Despite the existence of strong differences in non-survival phenomena, the survival of new firms is widely recognized as a beneficial phenomenon for economic growth. Beyond sector specific variables, environmental conditions and structural factors, there is still uncertainty about the determinants of survival rates. Taking into consideration contributions from the resource based view and organization ecology, we build a logistic regression model in order to verify the existence of a positive impact on firms survival for four blocks of variables. The first block refers to external funding, namely the previous venture capitalist’s funding and the ‘notoriety effect’ from global competitions. A second and a third block refer to the alliances and planned internationalization strategies. Finally, a fourth block refers to a business model component, i.e. the value proposition, and looks at the impact of the servitization [Vandermerwe, S. and Rada, J. (1988) Servitization of businesses: adding value by adding services, European Management Journal, 6, 4, 314-324] of the value offering. Data from a unique database on business plans of the Intel Global Challenge’s finalists from 2005 to 2012 are analyzed. The results of the logistic regression show a positive impact of the planned internationalization strategy, the existing alliances and the hybrid value proposition in the early years of new high tech ventures on their survival.