Chasing Entrepreneurial Firms

The search for a reliable dataset of entrepreneurial firms is ongoing. We analyze and assess longitudinal data on startups from two data sources—the National Establishment Time-Series (NETS) database and the Secretary of State (SOS) business registry data. Our primary purpose in this paper is to assess the usefulness and reliability of these two databases in measuring startup activity along a number of dimensions. Using the data to measure software startups, we conclude that data need to be carefully cleaned and adjusted from several biases before they become reliable. We carefully document our methodology and make suggestions for others to increase the utility of these sources. In particular, we find the NETS data enables identification of startup trends in high-tech industries at the regional level and the contribution of startups to local employment. (This version was prepared for the 2017 Industry Studies Association Annual Meetings.)IC2 Institut