Edited by Alain Fayolle, Paula Kyrö, Tonis Mets and Urve Venesaar
Chapter 11: A social network approach to a better understanding of the survival–growth phase of innovative new ventures
In view of its perceived social and economic benefits, the creation of innovative new ventures is a priority of national public policies. It also constitutes a source of considerable interest within the broader frame work of European policies which aim to position EC economies among the most competitive in the world (European Council, 2000). However, in France, according to the National Institute for Economic Statistics, the failure rate of start-ups remains very high. Indeed, half the firms do not survive beyond the first five years. The current economic and financial context considerably reduces the appeal of start-ups and negatively affects the recognition of their legitimacy. This is all the more significant in the case of high-risk innovative firms since they emerge and develop within a context of uncertainty and information asymmetry (Fayolle, 2005) that makes potential investors more hesitant and less inclined to get involved (Sauner-Leroy, 2004). The high failure rate of young firms calls for further examination of their dynamics of failure or success with a view to better comprehending the phenomenon and thus increasing their chances of survival and growth. The issue of entrepreneurial success has received a lot of attention from scholars.
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