Money, money, money? A longitudinal investigation of entrepreneur career reasons, growth preferences and achieved growth

Abstract

This paper longitudinally examines the relationship between the career reasons of nascent entrepreneurs, their growth preferences and subsequent growth achieved. The longitudinal design allows for examination and control of both survivorship and recall bias upon career reason and growth linkages. Substantial recall bias was observed in the career reasons of entrepreneurs, with the reported importance of self-realization and financial success, as explanations for entering venturing activity, being significantly lower when responses were obtained once the venture was operational. Consistent with economic motives, the importance that the entrepreneur places on financial success was a key determinant to explain cross-sectional differences in growth preferences of the entrepreneur, the intended size of the venture, and achieved growth. Further, the importance of financial success was robust to the use of both prospective and retrospective career reasons. While independence was the most important factor to explain the career choices of nascent entrepreneurs, independence was also found to be negatively associated with intended and achieved employment growth. Overall, the findings demonstrate that nascent entrepreneur career reasons for self-employment are not homogeneous, vary by growth intentions and preferences, and are associated with subsequent venture growth achieved.