Gazelle Firms


The Office of Advocacy of the U.S. Small Business Administration just released a study by Zoltan Acs of George Mason University and his colleagues. The study examined “high impact” companies – companies that “had sales of which have at least doubled over the most recent 4-year period and which have an employment growth quantifier of 2 or greater over the same period.”

To me, this is a very interesting study. Here are four things that I found interesting and why:

1. Only 3.8 of businesses are “high impact” companies. This indicates that few businesses become gazelles.

2. Only 2.8 percent of “high impact” companies were ten years old or less. That is, most gazelle companies are not new companies.

3. The industries in which Acs and colleagues found a high proportion of high impact firms are the same industries in which Census data show a lot of high growth new businesses. For instance, the “high impact” firm percentage and the percentage of new firms achieving between $5 million and $9.999 million in sales at age six correlated 0.60. That is, some industries appear good for both types of high growth firms.

4. The percentage of “high impact” firms differed across metropolitan statistical areas (MSAs) – but only ranged from 1.8 percent to 3.3 percent of companies. Stated differently, the MSAs with the most “high impact” firms only have 82 percent more “high impact” firms than the MSAs with the fewest high impact firms. That is, all places have at least some high impact companies.



Scott Shane Scott Shane is A. Malachi Mixon III, Professor of Entrepreneurial Studies at Case Western Reserve University. He is the author of nine books, including Fool's Gold: The Truth Behind Angel Investing in America ; Illusions of Entrepreneurship: and The Costly Myths that Entrepreneurs, Investors, and Policy Makers Live By.