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Recession Startups More Successful

Recession Startups More Successful

According to a new study, what doesn't kill your new business makes it stronger.

By:Kelly Faircloth / Inc
Published December 12, 2008

Entrepreneurs that keep their startups afloat during the economic crisis have a better-than-average chance of achieving long-term success, according to a new study by the Kaufmann Foundation.

The study, which analyzed more than 8,000 companies launched over the past 175 years, found that businesses started during down cycles in the economy were more likely to succeed.

Though fewer businesses are launched during recessions, a larger number tend to pay off for their owners when they go public, the study found.

“Having fewer resources forces people to be more careful with their money," said Paul S. Kedrosky, a senior fellow at the Kansas City, Mo.-based entrepreneurship advocacy group. "It also winnows the candidates down to those who are deadly serious and can survive on an IV drip of cash,” he said.

As such, Kedrosky said it's possible that the current recession could bring about an era of unprecedented success for entrepreneurs -- at least for those brave enough to launch a business these days.