Meeting entrepreneurs' support needs: are assistance programs effective?

This study sets out to examine the effectiveness of US start‐up assistance programs in meeting support needs of nascent entrepreneurs. It also aims to address whether (in)effectiveness influences entrepreneurs' perceptions of the value of the support provided by assistance programs.

Using data from the US Panel Study of Entrepreneurial Dynamics, the research answers three questions: What are the nascent entrepreneurs' support needs? What assistance do entrepreneurs receive from assistance programs? How do entrepreneurs value the assistance? These are used to determine: effectiveness of assistance programs, defined as the extent to which assistance provided addresses entrepreneurs' support needs; and the impact of effectiveness on perceived value of the assistance.

Assistance programs were effective in addressing the entrepreneur's support needs 26 percent of the time. However, entrepreneurs continued to perceive the support as being valuable, regardless of the lack of effectiveness. A likely explanation is that there is a mismatch between entrepreneurs' latent and expressed needs.

Three implications are: more effort may be needed to assist entrepreneurs in identifying their latent needs; effectiveness as defined in the study may not be the most appropriate approach; policymakers and program administrators should focus on making sure that the “right” entrepreneurial needs are being met.

In contrast with other studies that focus on entrepreneurs' satisfaction, the research measures assistance program effectiveness from the perspective of meeting entrepreneurs' support needs. Whether support services meet the needs of the entrepreneur could be a precursor to satisfaction, so this dimension of effectiveness should be examined.