RUI: Examining Early Stage Technology Firms' Use of Business Development Programs

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Entrepreneurship is critical for job creation, economic growth, and innovation. Given the difficulty of starting and building new firms, public and private organizations have created venture development programs to help firms survive and succeed. The programs offer services, education and access to resources. Examples of venture development programs include government innovation grants, business incubators, private accelerators, university-based incubators, and venture capital. Billions of dollars are spent each year on and by venture development programs in the U.S. alone. Work has shown that these programs generally work; however, few studies have looked at the long term outcomes of these programs or the relative performance of the participating firms. This study develops a deeper understanding of nascent firm participation in venture development programs by determining how and why entrepreneurs use these programs, examining how development programs influence firm outcomes, and identifying the most useful elements of each type of program.This research study has three parts. The first part builds a data set of nanotechnology firms in the U.S. by integrating several sources and includes detailed information about each firm, its participation in venture development programs, and the firms? outcomes. This part of the study provides insight into the types of firms that participate in the different programs. The next part of the study statistically examines how the participation in a program influences firm success. Multiple positive and negative firm outcomes are included such as business closure, bankruptcy, liquidation, acquisition, follow-on funding, and initial public offering to develop rich insights into these programs. The last part of this study asks firm founders about their participation in venture development programs and how their engagement of the programs influenced their firms? outcomes. Thus, this research expands our understanding of how technology firm founders can influence the longevity of their firms by participating in venture development programs. Understanding how entrepreneurs choose and engage these programs can improve the offerings from both the private and public sectors. Programs that influence the success of technology ventures are important for innovation, employment, and the federal funding of related education, research and development. Thus, this study supports policy makers in their endeavors to improve the development and availability of services and economic resources that support venture growth, innovation and national competitiveness.