Are Formal Planners More Likely To Achieve New Venture Viability? A Counterfactual Model And Analysis
This study assesses whether founders who write formal plans are more likely to achieve new venture viability. This is important because, despite its popularity, there is considerable debate about the value of plans. One root reason for this is that what prompts a founder to plan also impacts his/her chances of creating a viable new venture. The study’s novelty is to separate out influences on the decision to plan from the plan-venture viability relationship. Our results show that better-educated founders, those wanting to grow and innovate, and those needing external finance are more likely to plan. Subsequently, having isolated what prompts planning, we assess if writing a plan actually promotes venture viability. We find that it pays to plan.
