Entrepreneurial Ecosystem influence through the Start-up life cycle

Abstract

An entrepreneurial ecosystem has become a paradigm between policy makers, regional developers as well as profit seeking organizations to spur start-up establishment and growth rates. Numerous studies have focused on conceptualization of an entrepreneurial ecosystem and the potential benefits that may be accrued regionally by effectively developing a bedrock for start-ups. This study is one of the first to compare two technically oriented regions, to find insights into intricate relationship between entrepreneurial supportive ecosystem and start-up growth from firm-level point of view. The data for this study was collected in Delft, The Netherlands, and Vilnius, Lithuania, to see the effect of these entrepreneurial supportive ecosystems when contextual factors are taken into consideration.A literature review was conducted to understand the macro-level perspective of an entrepreneurial ecosystem and the firm-level critical junctures during the development process of these high-tech start-ups. An entrepreneurial ecosystem model highlighting the most important support factors, and a simplified start-up life cycle model are presented. A conjoint model including contextual regional differences is designed as the foundation for the study - to understand to what extent an entrepreneurial ecosystem supports firm-level business activities.The data for this study was collected through a digitally distributed survey, desk research and several expert interviews. The qualitative information was used to highlight main business activities at each start-up life cycle stage. The quantitative information, regarding start-up perceptions at these stages, was analysed using an independent samples T-test, correlation matrix and mean ranking.It was found that start-ups in Vilnius mostly occupy IT Service, Fintech and Hardware industries, while Delft start-ups operate in deep-tech/high-tech, hardware and Med-Tech industries. These differences in combination with contextual interpretations explain some of the differences occurring in entrepreneurial ecosystem support evaluations. The results show that the entrepreneurial ecosystem is most supportive in the early stages of start-up growth with diminishing effects on later stages. Raising financing capital has been found to be highly supported by entrepreneurial ecosystems in both regions, even though start-ups did not perceive this activity as very important in neither of growth stages. Research and Development support in both regions was perceived as average from founders in both regions. Considering that Delft bolsters a high-quality university which should induce R&D activities, the support is cancelled out by the differences in occupied industries and their respective competitiveness. This means that more R&D support is needed for start-ups in Delft. Moreover, legal support has been found to be higher in Delft and attributed to a more robust regulatory system in The Netherlands. Lastly, it was found that considering important business activities at growth stages, start-ups mostly rely on internal capabilities to grow in later stages. This thesis report contributes to paving way for the conjunction of entrepreneurial ecosystem and start-up life cycle academic research field using a firm-level and holistic approaches. The study and its results should provide insights for entrepreneurial ecosystem facilitators, such as incubators or accelerators, and start-up founders alike. Entrepreneurial ecosystem support strength changes from early to latter stages shows facilitators the need to closely study start-up requirements to navigate stage-contingent critical junctures in order to provide effective support.