The risk of growing too fast in the start-up phase. The case of gazelle enterprises.

The sustainability of early-rapid growth is at the heart of an intense debate in contemporary research. While rapid growth is often perceived as a clear indicator of business success, it can quickly turn into a double-edged sword: excessive growth rates can lead to increasing organi- zational complexity and increased marginal costs that most new ventures often struggle to manage. This thesis investigates the phenomenon of growth crises in the context of new entrepreneurial ventures, examining both internal and external factors that can affect the long-term survival outcomes of growth strategies. Although high-growth startups (also referred to as gazelles) are often celebrated for their disproportionate contribution to job creation, empirical evidence sug- gests that many of these companies face critical challenges when rapid growth becomes un- sustainable or stagnates. In fact, a significant number of high-growth startups struggle to main- tain high growth rates and do not survive in the long run. This raises important questions about the long-term sustainability of early-rapid growth and the fate of these companies after periods of rapid expansion. Understanding the survival dynamics of growth-oriented firms is fundamental, especially given the increasing policy focus on promoting high-growth startups. Unfortunately, the ef- fectiveness of such policies largely depends on the ability of these firms to sustain their growth and retain job creation after the initial phase of expansion. Therefore, analyzing the factors that influence the survival of high-growth startups is essential for policymakers, scholars, and practitioners aiming to foster a resilient entrepreneurial ecosystem. This thesis is organized as a collection of three original articles, divided into four chapters. Chapter 1 provides an overview of the thesis, outlining the theoretical framework, research objectives and the context of the study. It also introduces the research question and underscores the importance of examining the survival dynamics of high-growth start-ups. The chapter also highlights the key contributions of this research, offering a roadmap of the entire thesis and its relevance for both academics, practitioners, and policy makers. Chapter 2 offers a comprehensive bibliometric and systematic review of the literature on high- growth small and medium-sized enterprises (SMEs). By analyzing articles indexed in the Core Collection of Web of Science (1985-2023), this chapter presents the current state of research in the field, identifies key thematic areas, prevailing research trends, and highlights significant knowledge gaps. It also proposes a research agenda to guide future studies in understanding the dynamics of rapid small business growth. Chapter 3 presents an empirical study that explores the U-shaped relationship between early- rapid growth and survival risk in new ventures. This chapter examines how both excessive and low rates can increase the likelihood of early-stage failure. It also investigates the role of stra- tegic decisions, particularly firm location, and how proximity to industrial districts (IDs) mit- igate the pressures faced by growth-oriented start-ups. The potential advantages of agglomer- ation externalities in IDs are also explored, demonstrating how these can impact the survival outcomes of growth strategies. Chapter 4 evaluates the effectiveness of public financial support policies, with a specific focus on the Italian Central Guarantee Fund (CGF). Through a panel survival analysis, this chapter compares the survival rates of government-backed high- and low-growth startups. It also in- vestigates how financial mechanisms like the Italian CGF can help alleviate financial con- straints faced by early-stage firms and improve their chances of survival. This thesis contributes to both theoretical and practical understanding of the growth and sur- vival dynamics of new entrepreneurial ventures. From a theoretical perspective, it enriches the academic debate on the growth and survival dynamics of young firms by examining the moderating factors that shape the relationship be- tween early-rapid growth and post-entry survival. From a theoretical perspective, it enriches the academic debate by examining the moderating factors that shape the relationship between early-rapid growth and long-term survival. Specifically, it highlights how strategic deci- sions—such as firm location and access to public financial support—can significantly influ- ence the sustainability of rapid growth in new ventures. From a practical standpoint, this research provides valuable insights for entrepreneurs and practicioners facing the complexities of early-stage growth. It emphasizes the importance of making strategic choices, including selecting the right location and utilizing public financial support mechanisms, in order to enhance the chances of survival during the critical early years of a firm’s lifecycle. For policymakers, the thesis underscores the importance of targeted interventions to support high-growth startups. The findings suggest that tailored financial programs, such as the Italian CGF, are essential for fostering a resilient entrepreneurial ecosystem. By providing startups with the necessary resources to overcome financial constraints, these policies can significantly improve the survival prospects of high-growth businesses and contribute to job creation in the long run. In conclusion, this thesis contributes to a deeper understanding of the complexities of the sur- vival dynamics of high-growth startups and challenges the prevailing belief that rapid expan- sion is always the path to achieving business success.