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In search of Italian gazelles

Innovative accounting for high-growth start-ups

Gazelles, unicorns, cheetahs... the start-up business world is full of animals that sound exotic and difficult to catch. Indeed, this is quite apt as most fail to chase success, and fold within their first few years. explains that many suffer from a lack of good accounting techniques on offer. Accounting needs to do better to meet the problems that start-uppers face. He outlines how his innovative “Startup” group is trying to address the gap. 

The start-up world seems to be full of animals, what is so interesting about gazelles?

They are not animals! Of course, in a fiercely competitive marketplace, different kinds of start-up company will adopt different strategies for survival and success. But not everyone agrees what a start-up is. Certainly, scholars, entrepreneurs and consultants agree that not every new small business is a start-up.

When people and the media talk about start-ups they talk about innovative small tech companies. These might be founded by a group of friends at university, or at work, or even in a garage – the origin of several famous “unicorns” including Apple and Amazon! The popular imagination has been shaped by the tech unicorns of Silicon Valley, from Airbnb to Tesla. But they are called unicorns for a reason. If not mythical, they are statistically too rare to be considered practical examples to follow.

“Gazelles” are more plausible models of excellence. They typically quickly achieve a high-level of growth – 20% or more within their first 5 years of existence. While they might not be as rare as unicorns, they are still rare. High-growth start-ups account for around 3.5% of new American companies, and just 1.2% of Italian ones.

Yet in Italy, as in many other countries, small and medium-sized enterprises (SMEs) contribute perhaps over 90% of new jobs. They are the backbone of the economy, and their growth is driven by communities. With less access to capital or knowledge, successful start-ups are laboratories of innovation and sustainable economic growth. If we can better understand the principles of successful start-ups, we can help entrepreneurs from wider walks of life and with new ideas to achieve success. My guidelines for start-ups draw on gazelle-like qualities of success.

Where does accounting come into this?

Any successful business needs rigorous, relevant and useful information. This information is produced by accounting-based systems and techniques. Yet in much of the business world, and certainly in Italy, accounting consultancy for SMEs tends to impose top-down models built around the needs of big business. As a scholar of accounting for society, I want to help the field and the profession to develop the tools to meet the complex needs and problems of innovative SMEs.

We need to widen our concepts of accounting for society. It should be seen as the “universe of all possible accountings” through which any aspects of social life (including economic, wellbeing, health, etc.) could be measured and calculated. As a starting point, this means grounding our approaches in the informal techniques that SMEs and community groups use to grapple with the problems they face. These can be made into more formal activities like brief reports, newsletters and blogs that compile and disclose important information for clients, investors and other stakeholders.

It is my belief that accounting for society should be something that emerges from people and businesses. It can be a tool for sustainability and the inclusion of communities in shaping the economy and society. SMEs are the backbone of the Italian economy. But it’s not Silicon Valley, and small start-ups struggle to compete with larger established firms. Ultimately, wealth based on innovation, and therefore sustainable growth, is going to come from start-uppers. We need a shared space for accounting academics, professionals and start-uppers to exchange our knowledge and experience.

Have you tried to create this space in Italy or elsewhere?

This is exactly what I am trying to do as part of my current impact case study project to create accounting guidelines and models for high-growth start-ups! I have been initiating and helping to lead an unprecedented academic-professional “Startup” group. This group brings together members of SIDREA, the Italian Association of Professors in Accounting and Business Administration, and CNDCEC, the National Council of Chartered Accounting and Accounting Experts.

On the SIDREA side of the group are myself and academic colleagues from seven universities spanning the length and breadth of Italy’s regions, reflecting also the regional variety of community-based start-ups that we want to help. Meanwhile, CNDCEC is the voice of the Italian accounting profession, it is like the Chartered Association of Accountants in England and Wales but closer to the state.

The group officially formed at the start of 2024, and we have met every two weeks since February. This has been a great way to build our relationship and a sense of trust, which is so important for getting professionals and practitioners to listen to us and work with us. Ultimately, we want our academic expertise to be of use to and informed by the wider business community and public.

As our first step into the “outside world” of professionals, we have been looking at business models and how to plan, manage and evaluate start-ups. We have been working on these guidelines with and, in the first instance, for chartered accountants who provide consultancy to start-uppers. However, they will of course be useful for the start-up entrepreneurs, the accelerators and policymakers that we eventually want to work with directly as well.

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