Counseling assistance, entrepreneurship education, and new venture performance

Purpose – The purpose of this paper is to apply the theory of guided preparation to investigate the relative impact of outside counseling assistance and entrepreneurship courses on new venture creation and performance. Design/methodology/approach – To attain a sample of nascent entrepreneurs who had been impacted by entrepreneurship education and entrepreneurial counseling, 256 individuals who received counseling from the Pennsylvania Small Business Development Center in 1996 or 1998 were surveyed. The authors ran a logistic regression model using venture start‐up as the categorical dependent variable to investigate whether entrepreneurial education and counseling had an influence on the creation of new ventures. To test whether entrepreneurial education or counseling had a long‐term impact on the growth of new ventures, hierarchical regression analyses were run using employment in 2003 as the dependent variable. Various control variables were used for both sets of analyses. Findings – Findings indicate that counseling has a significant impact on venture performance but entrepreneurship courses do not. In contrast, entrepreneurship courses are related to venture creation while counseling is not. Research limitations/implications – Consistent with theory, the results suggest that counseling programs allow entrepreneurs to develop context‐specific tacit knowledge about their ventures and are best delivered immediately prior to venture start‐up. Entrepreneurship courses appear to indirectly influence new venture performance by increasing the odds of start up. Originality/value – This comparative test of the theory of guided preparation contributes to the understanding of the effects of education and counseling on the creation and long‐term performance of new ventures, informing how the delivery of such programs can be improved.