A Comparative Study on the Profitability Performance of European Innovative and Social Startups in Pre-Covid and Covid Periods

This study examines the profitability performance of innovative and social startups across six European countries, comparing pre-Covid (2017–2019) and Covid (2020–2022) periods. By analyzing data from a sample of 7,179 startups using panel regression models, we investigate the relationship between profitability and several potential drivers, such as financial structure, liquidity, size, and the size of the board of directors. Our findings reveal divergent trends between innovative and social startups, highlighting the complex, context-dependent nature of startup performance. They also show that these relationships vary across different startup types and economic conditions. This research contributes to the literature on startup performance by offering insights into the differential impacts of economic shocks on various types of new ventures. It emphasizes the need for adaptive strategies in uncertain economic contexts. The findings provide valuable insights for entrepreneurs, investors, and policymakers seeking to foster resilient startup ecosystems. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2025.