The influence of guided preparation on the long-tenn perfonnance of new ventures

This article further develops a theory of guided preparation and new venture performance and tests its fundamental relationships on a sample of 159 new ventures that received outsider assistance 5-9 years earlier and had been in business for 3-8 years. The results suggest that the long-term growth of the ventures since start-up is significantly related to guided preparation. However, a curvilinear model rather, than a linear model, was found to best capture the relationships of interest. This suggests that there are diminishing marginal returns associated with guided preparation and that too much may even have a negative influence on performance. (c) 2004 Elsevier Inc. All rights reserved.