Loosening the apron strings: family ownership and venture size in service venture survival

This study investigates the survival dynamics of service ventures, comparing their outcomes with non-service ventures and examining how heterogeneity within service ventures shapes their likelihood of survival. Because services involve real-time interaction, customer participation, and heightened variability, service ventures may face distinct and more acute survival challenges than firms in non-service industries. Using a near-census of Portuguese new ventures with certified financial data, we first compare failure hazards between service and non-service ventures and then focus on service ventures to analyze how size, proxied by number of employees, and family ownership jointly influence their survival. Drawing on stewardship theory, we argue that family ownership can help smaller service ventures navigate early vulnerabilities by aligning ownership and control, although this benefit is expected to weaken as ventures grow. The results support these expectations: service ventures face higher failure hazards than non-service ventures; within services, larger firms show lower failure risk; and family ownership reduces failure primarily among smaller service ventures. As firms expand, the protective effect of family ownership diminishes and may eventually constrain performance. Overall, the findings highlight the need to distinguish service from non-service ventures when studying entrepreneurial survival and to account for size and ownership heterogeneity within service-based firms. The study advances service entrepreneurship research by clarifying the survival patterns of service ventures and contributes to family business literature by identifying when family ownership is most advantageous for sustaining service venture survival.