Are software start-ups different? An empirical study on performance of Finnish software companies

Abstract

Entrepreneurship and start-ups have become modern hype terms. Especially, software start-ups have gathered a lot of interest due to a few successful examples, and the potential scalability of new business. A plethora of accelerators, events and communities has been found as well as new research agendas announced to boost and study the new phenomenon. The question, are software start-ups different, still remains unanswered. This study address whether software start-ups differ from the other kinds of new companies. We use the set of over 20,000 Finnish companies founded during 2010–2013 as an empirical material for our inquiry. To compare the financial performance of software start-ups and the rest, we use the current ratio, profit margin, revenue and return on assets as measures of financial performance. The results show that, indeed, software start-ups differ from the control group in the used financial indicators.