Founding a Business Inspired by Close Entrepreneurial Ties: Does it Matter for Survival?

Abstract

Founding a business may be inspired by close entrepreneurial ties, that is, business–owning relatives or friends. We analyze if and when such inspiration is associated with post–entry survival. Drawing on longitudinal data on 942 founders, we find a positive relationship only if founders start by taking over an existing business, or spend considerable time at start–up. Moreover, the impact of close tie inspiration is negative for founders with prior entrepreneurial experience, revealing a dark side to serial entrepreneurship. Our findings show that new firm survival can be better understood by modeling contingency variables.