Vlerick Expertise in Entrepreneurship

In the forecasts they have to report to their investors, entrepreneurs overestimate their revenues for the following year by an average of 22%. Founders are consciously more cautious than non-founders. Investors who apply a standard discount to revenue forecasts therefore run the risk of being quite inaccurate themselves. Finally, over-optimism is penalised. Those who truly exaggerate find themselves being labelled as risky businesses. These are the most important conclusions of a new study on the use of entrepreneurs’ revenue forecasts as a tactic to impress investors.

Fast-growing businesses are known as the engine of job creation. The 2020 Belgian High Growth Monitor shows that 920 fast-growing companies were responsible for 52,779 new jobs. Although these figures reveal that Belgium is doing less well than the European average, this group of healthy Belgian ‘gazelles’ does show stability. Over the years they have created around 50,000 jobs during each growth period. A hopeful sign, especially now that many companies are having trouble keeping their heads above water.

The 2020 Rising Star Monitor reveals that about one in two high-growth ventures are entirely internally funded. Over 90 percent of young, high-potential ventures which had not used external funding did not even apply for it. About three in four ventures do not do so because they believe they do not need it. Beyond that, entrepreneurs don’t apply for bank financing because they don’t think they have enough financial history, they see the application process for subsidies as too cumbersome, fear losing control with venture capitalists and angels, and they consider crowdfunding as too time consuming.

The Covid-19 crisis has impacted firms severely. By taking quick action and by implementing the lessons learned, entrepreneurs try to minimise the damage. A research report by lecturer and Senior Researcher Yannick Dillen summarises 220 responses from a survey with members / entrepreneurs from the Impulse Centre ‘Growth Management for Medium Sized Enterprises’ (iGMO). They share insights on the impact of the crisis on their companies, the actions they took and their learning lessons from the crisis so far.

The widely held belief that European scale-ups are mainly innovative tech companies is incorrect; they can be found in all sectors and at all levels of innovation. However we can identify major differences between sectors in terms of size and growth, with scale-ups that are active in IT and consumer goods and services leading the way. Scale-ups with external investors on board are more professionally managed and have made greater progress in terms of internationalisation, innovation and talent management. All the same, attracting additional funding proves very difficult and hampers their further growth ambitions. These are some of the conclusions of the European Scale-Up Report, conducted by Vlerick Business School on behalf of Scale-Ups.eu.

Start-ups and young businesses aiming for growth need resources - funding, staff, material, customers and so on. But why would anyone provide resources to a small business that has nothing concrete to show for it yet? How can you convince others if you haven’t yet proved your worth? A study by Professor Sophie Manigart and her colleagues show that what are known as ‘soft signals’ can be very useful in this situation.

A company’s Advisory Board and Board of Directors can have significant impacts on its performance. However, not so many young Belgian companies with growth potential have such governing bodies. Only 8% have Advisory Boards, and one in five have Boards of Directors. Although the compositions of the Boards of Directors are relatively diverse and complementary, only one in five has independent directors. Moreover, only 16% have a female presence; compared to the US (37%) or the UK (47%), women are under-represented on Belgian Boards of Directors. On the positive side, the Boards of Directors meet much more frequently than is generally recommended, which means that these young growth companies fully exploit their expertise. These are the main conclusions of the fourth edition of the Rising Star Monitor

When you consider pursuing a new business opportunity, it makes sense to assess the opportunity in a systematic way (rather than purely relying on gut feel). A business plan helps you structure your analyses and present them in a way to help others understand your plan – and hopefully agree with you.

There is an ongoing debate in academia about whether family firms are more socially responsible than others. So far, research has not been conclusive. In order to further the discussion, professor Kerstin Fehre, together with a colleague from the Institute of Management at the Karlsruhe Institute of Technology, rephrased the question: “Does the management of family firms pay more attention to corporate social responsibility (CSR)?”

A group of 822 high-growth firms accounts for one in three jobs created by private companies with a minimum of ten employees. These high-growth firms represent just 3.5% of Belgian businesses with a minimum of ten employees. A small minority of 3.5% of Belgian businesses with a minimum of ten employees is responsible for the creation of 45,947 jobs. This amounts to 67% of the total net number of jobs created by business with a minimum of ten employees in the period from 2014 to 2017. This is apparent from the results of the annual Belgian High-Growth Monitor.