75% of young ventures expect growth despite recession
The inventures and WIFO crew finalising the very first Entrepreneurship Index survery
End of September, we published the results of what entrepreneurs throughout CEE told us about their expectations for the following months (read more here).The results made us dig deeper into this topic and together with the leading institute for applied empirical economic research in Austria, WIFO, we conducted a survey in order to get a better understanding of scene of young ventures in Austria. Moreover, the cooperation with WIFO made it possible to find out more about the sentiment and needs of young businesses but also to view the results in the light of to the “WIFO Konjunkturtest“, a survey on the overall economy in Austria conducted with the same methodology.
Yesterday, today, tomorrow: positive analyses and expectations
The results show that young innovative businesses are obviously more optimistic than established businesses.“Dr. Werner Hölzl, economist at the WIFO
The overall results show that young businesses, in general, are more optimistic than already established companies. The “WIFO-inventures Entrepreneurship Index“ notes a value of 48.6 points which describes a positive stance on the past, current and future situation of the business. In comparison: the “WIFO Konjunkturtest” that researches this value for the overall economy with the same methodology, lies at -0.2 points and shows slightly more negative attitudes and expectations for established companies.
“The results show that young innovative businesses are obviously more optimistic than established businesses,“ says Dr. Werner Hölzl, economist at the WIFO.
Increasing demands and growing production
The majority (62%) states that the demands for their services and products have increased over the past three months. Only 3% report that demands and production have dropped in this time. The evaluation of the orders, on the other hand, shows that the interviewed businesses are still in a build-up phase. While 55% stated they have sufficient or more than sufficient orders, this share is distinctively higher in the overall economy (67%).
Optimistic outlooks for the future
About 75% expect the demands for their services and products to increaseover the next three months and about 66% count on their business improving in the following six month. Not even one of the survey participants expected the state of their business to get worse.
Bootstrapping beats investments
The results suggest that young companies regard own capital more accessible that bank loans.“inventures co-founder Claudia Käfer
More than half of the sample expect a low willingness of banks to grant loans to young ventures and 16% do not think they have a realistic chance to receive a loan. The WIFO Konjunkturtest results, on the other hand, show that only 2% perceived their credit chances as low. The willingness of investors to finance young companies is rather balanced: about 26% of the young ventures stated that investors are cooperative, 32% perceived them as restrictive and 42% were in between.
Innovative ideas need capital to become reality. 33% of the young ventures were able to secure an investment from external sources in the past 12 months. More than half of them (57%) were satisfied with the amount and conditions of the investments. Only 8% said the conditions were not acceptable and 6% said they had no realistic chances to receive any external investment.
At the same time, the majority said they don’t need loans or investments. “The results suggest that young companies regard own capital more accessible that bank loans,“ confirms inventures co-founder Dr. Claudia Käfer.
The future of the “WIFO-inventures Entrepreneurship Index“
67 companies with 431 employees participated in the “WIFO-inventures Entrepreneurship Index“, the first regular survey that offers insights into the overall sentiment of young businesses and their evaluation of the current and future economic situation. To allow for an international comparison, after the pilot study in Austria the Index will be expanded to the CEE region next year.