[Oliver Oechslein, is a German MBA graduate from the Munich University of Technology and the Tongji University Shanghai. He was doing a graduate research project about factors of success for Chinese startup companies in summer 2010, supervised by Andranik Tumasjan. He kindly sent me the abstract and some conclusion which I think are valuable to be shared with our readers. You may contact Oliver for the full thesis.]

In the last few years, entrepreneurship has become more important worldwide, and the founding rate of new companies has increased significantly. However, the failure rate of new ventures is still about 40% in the first years, and in general starting a new venture is considered a high-risk activity according to research scholars. Peña (2002) states that only 54 percent of new businesses survive more than one year, and only 25 percent more than six years. But who are the people in the startup companies who have to deal with these risks? For many years, researchers focused mainly on the individual entrepreneur as a human component in the venture. In the meantime the research focus reflects a growing interest in entrepreneurial teams, which are responsible for most startup foundations today. Cooper and Bruno (1977) found support that over 80% of startup companies which survive longer than two to three years were founded by entrepreneurial teams – defined as a group of two or more individuals who are responsible for the creation and management of new ventures.

The People’s Republic of China has shown strong economic growth rates within the last years, which can in part be attributed to the increasing foundation of startup companies. Due to missing familiarity with management, market, and team based novelty situations, it is difficult for entrepreneurial teams to operate successfully during the first years after starting out.

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Gang Lu

Dr. Gang Lu - Founder of TechNode. He's a Blogger, a Geek, a PhD and a Speaker, with passion in Tech, Internet and R'N'R.