Innovative family startups: an emerging research field

  • Melita Nicotra
  • Carmela Elita Schillaci
  • Marco Romano
Keywords: family startups; family business; innovative startups

Abstract

Purpose of the paper: The paper aims to study the value creation of Innovative Pure Family Startups (IPFS), which are innovative startups characterized by simple family governance, as compared to the Total population of Innovative Startups (TIS).

Methodology: Adopting the T-test analysis, the contribution detects whether significant differences exist between IPFS and TIS in terms of financial structure and profitability performance.

Findings: Results show that IPFS perform the best in terms of profitability. Moreover, they highlight IPFS’ preference for debt rather than opening up firm equity to external investors.

Research limits: Our results are limited to IPFS and not generalizable to all Innovative Family Startups, including Innovative Professional Family Startups. Moreover, no distinction between Innovative Family Spin-off and Innovative Family Newco is made.

Practical implications: Implications are related to business governance structure and organizational governance to support the managerial decision-making process.

Originality of the paper: The paper tries to fill a gap in both the literature on family business and on entrepreneurship. On the one hand, it analyzes the start-up phase of family businesses that is generally neglected in family business studies. On the other hand, it detects the contribution of family governance to the innovative startup phenomenon, while focusing on the role of family firms in innovative high tech industries that traditionally under-participate compared to their non-family counterparts.

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Published
2019-10-03