Publication Date

March 1998


In this paper we introduce a concept that we call the Entrepreneurial Growth Ceiling (EGC). We develop arguments that new venture IPOs hit the EGC prior to their IPO, and the ceiling is part of the impetus for going public. The EGC represents a set of problems, and we hypothesize that a firm’s ability to break through the ceiling quickly (within a year following the IPO) is critical for long-term performance. We argue that proceeds from the IPO will aid firms in breaking through the ceiling if the proceeds are strategically allocated. Results indicate firms that allocate proceeds to human resources and research and development (R&D) resources are more likely to break through the EGC quickly and enhance long-term stock performance.


Suggested Citation
Welbourne, T. M., Neck, H. M. & Meyer, G. D. (1998). Getting past the “entrepreneurial growth ceiling”: A longitudinal study of IPO firm growth through solution driven strategies (CAHRS Working Paper #98-08). Ithaca, NY: Cornell University, School of Industrial and Labor Relations, Center for Advanced Human Resource Studies.

"The Entrepreneurial Growth Ceiling: an Application of Resource- Based Strategies in New Venture Initial Public Offerings (IPOs)" is from title page of paper.