Start-up Investment Research Articles

SOLUTIONS TO PROMOTE ENTREPRENEURSHIP AND INNOVATION IN INFORMATION TECHNOLOGY IN VIETNAM

Entrepreneurship has been enlightened by the natural law of economic development, stemming from Vietnamese people's creativity and entrepreneurial spirit. But it cannot be "locked" due to the lack of necessary nudges, which are financial and credit instruments. Some foreign investment funds have grasped this trend and implemented very successful premium investment services, creating big names in the Vietnamese market. In recent years, the State has gradually recognized several major roles of small and medium-sized private enterprises in general and entrepreneurship in particular for economic development. To promote strong and sustainable development, the State needs to develop appropriate policies and legal regulations quickly. At the same time, there are specific programs to help form and create new businesses, including, most importantly, establishing financial mechanisms to participate with private investment in startups, according to the model that many countries have done very well. Therefore, students propose to research the topic of "solutions to promote innovative entrepreneurship in the field of Information technology in Vietnam".
 Keywords: Information technology, Science and Technology, Startups.

Startup accelerator analysis: strategic decision on effort exertion and information disclosure regime

PurposeThis study aims to investigate a startup accelerator’s decisions toward exerting effort in an information acquisition process and selecting an information disclosure strategy. In particular, the authors are interested in examining which factors may cause the accelerator to report more or less accurate information, which will subsequently affect the investment decision and the outcome of the ventures. This study examines the impact of the equity share taken by the accelerator on the effort level being exerted in the information acquisition process, as well as the accelerator’s decision on the information disclosure regime.Design/methodology/approachThe authors use mathematical models built upon well-established theoretical and practical concepts to analyze the research problems and derive the findings.FindingsThe authors show that when the accelerator takes a sufficiently large equity share from the entrepreneur in exchange for admitting the entrepreneur’s venture into the acceleration program, the accelerator is motivated to exert a significant level of effort to observe an accurate signal for the quality of the venture, and then disclose the information about the venture’s quality consistently with the observed signal (informative disclosure regime). On the other hand, if the accelerator takes a small equity share, it is optimal for her to exert no effort in the information acquisition process and simply adopt the basic disclosure regime, where the accelerator reports the quality of the venture based solely on the ex ante expected payoff of the venture, regardless of the observed signal.Practical implicationsThe results indicate that an equity sharing scheme, which awards a sufficient amount of equity to the accelerator, can be an effective tool to help obtain accurate information about the quality of a startup venture and make a well-informed investment decision.Originality/valueThis research illustrates that the ownership stake of the accelerator can potentially indicate the accuracy of the information about the venture provided by the accelerator to outside investors. That is, when the stake held by the accelerator is large, the investors can conjecture that the information about the venture reported by the accelerator may be highly accurate and reliable. In contrast, if the accelerator holds a small stake, then it is likely that the information provided by the accelerator may not add any value to the publicly available information. These insights can guide investors (e.g. angle investors, venture capitalists, etc.) in making well-informed startup investment decisions.

In Japan, start-up culture is starting to emerge

In parts of Japan that aren’t connected to a pipeline network, propane is delivered in cylinders that can weigh over 60 kg. The weight of those cylinders might drop to just 10 kg thanks to a new material being developed by Atomis, a start-up that emerged from Kyoto University. For years, start-up activity in Japan was moribund. But now, companies like Atomis are sprouting in the chemical, material, and pharmaceutical sectors. The emergence of innovative companies in the country is fueled by a sharp increase in the availability of seed capital and by government measures to encourage start-ups. But Japan continues to lag the US in start-up investment, and business leaders don’t see that changing soon. Both the government and major business groups have expressed concern that Japan is losing its economic vitality. In 1989, when the Tokyo stock market hit an all-time high, 7 of the world’s 10 largest

Understanding the perceptions of Brazilian executives of software firms about Critical Success Factors

Our objective is to understand the perceptions of the Brazilian executives about the CSFs to achieve superior organizational performance. We defined a qualitative and quantitative design composed of an Analytic Hierarchy Process and Content Analysis methods. We identified that Marketing and Innovation are the most important CSFs and the interviewed executives suggested three additional factors, i.e., Investment in Startups, Digital Marketing and National Culture, that were not previously identified in the literature review. We highlight the availability of a new framework of CSFs based on different sources and in-depth interviews with Information Technology (IT) executives. Our study also contributes to an overview of CSFs in the Brazilian IT industry.

How Investors Shape Who and How Startups Hire

Early hiring decisions have important immediate and enduring effects on developing startups. Yet startups often struggle with hiring because they lack the resources, networks, and routines that enable effective hiring. Investors can help startups overcome these deficits. To understand how investors help startups overcome this struggle, we analyzed interviews and observations with startup investors, founders, hiring managers, actual and prospective employees, and other experts. We find that the advice and action of angel investors, VCs, accelerators, and other investors influences startup hiring. We show that investors have clear expectations and that these are made known to entrepreneurs through both targeted and diffuse means. For the most part, the targeted influence leads to the implementation of specific practices in startups where investment has already been made and encompasses four distinct spheres: why there should be a hiring plan, how to hire, who to hire, and what jobs to hire for. The diffuse influence happens when without targeting a specific startup, investors and others in the ecosystem communicate investors’ expectations around team composition: e.g., demographic and skill diversity as well as work commitment. In anticipation of these investor expectations, founders make specific decisions about hiring. We also saw evidence that hiring-focused interactions between entrepreneurs and investors affected more than these immediate hiring outcomes. By guiding their hiring, investors enhanced startups ability to attract additional investments in subsequent rounds of fund raising.

Backing the Right Jockey? Founder Traits and Early-Stage Funding in Digital Entrepreneurship

In digital ecosystems, startups operate in a dynamic business and technology environment, where the effect of founder backgrounds and personality traits are more relevant at the early stage of capital infusion. Using theories of human capital and signaling, we study whether and how human capital signals of education, professional experience and personality traits of the founders influence early-stage venture capital (VC) investment in digital startups. We argue that in the digital sector, founders are expected to demonstrate agility through the practice of strategic flexibility in order to build a sustainable competitive advantage. Our empirical analysis uses micro-level data about firms, early-stage investment and entrepreneurs in addition to transcribed investor interviews about digital startups from USA, India, Russia, Brazil, China, and Israel between 2012 and 2018. We conclude that founders with many years of professional experience and with fewer career-changes attract higher investments at the early-stage compared to other founders. Similarly, digital startups with founders who were educated in foreign countries and with educational degrees from premier institutes attracted higher early-stage investment. We classify founders based on human capital signals and discover heterogeneity among these groups with respect to investment in different countries.

University Venture Capital – The Promise and Pitfalls of University Direct Investments

Over the past three decades, universities in industrialized countries have become increasingly active as venture capital financiers. Here, we analyze if investments in university-affiliated portfolio companies, in the form of an institutional-personal relation between the university and the founders, are a commercially successful investment proposition. We use a hand-collected data set of 706 university portfolio companies in the United States and the United Kingdom to extend previous case-based evidence that investments in faculty and student-led start-ups are an elusive promise that rarely pays off commercially. Furthermore, we provide evidence that geographic proximity to a top venture capital ecosystem is a highly performance-relevant characteristic for university investors.

The Impact of Institutional Logic: Intensified Significance of Technology Independence and VC firms

Before evaluating the performance of government venture capital firms, we need to understand how their behaviors are different from private venture capital firms and why. Based on institutional logic perspective, government venture capital firms’ behavior would be deviant from private ones because of the additional state logic they embody. Leveraging the ZTE crisis, an exogenous event that strengthened the state’s pursuit of technology independence, we compare how government and private venture capital firms’ tendency to invest in high-tech high-trade startups is changed. Using 18,164 investment events in mainland China, we found that government venture capital firms significantly increased their investment in high-tech high-trade startups after the ZTE crisis. In contrast, private venture capital firms present no significant change. However, as related experience and same province condition positively moderate the impact for private venture capital firms, they can hardly moderate the impact for government venture capital firms. Focusing on how organizations cope with dynamic tensions, we extend institutional logic studies by demonstrating that hindrance comes from contesting logic and other goals of the same logic. As these two sources hinder in different ways, we emphasize the role of audiences in how logic works.

Crossing the “valley of death” of startup investors’ attention: The importance of investor deck clarity

Crossing the “valley of death” of startup investors’ attention: The importance of investor deck clarity

Crowdfunding Success Effects on Financing Outcomes for Startups: A Signaling Theory Perspective

This study adopts a signaling theory perspective to examine whether and how crowdfunding (relative to angel financing) influences subsequent venture capital (VC) investments in startups. We used a bivariate probit model with propensity score matching to address the potential endogeneity of the initial funding choice. Subsequently, we found that crowdfunded startups have a lower chance of receiving VC funding than angel-financed startups and that the effect is more negative for startups located outside of startup cluster cities. We show that corporate VCs, unlike independent VCs comprising the majority of VCs, favor crowdfunded startups. Our study contributes to the literature on crowdfunding, startup finance, and the transformative effects of IT-enabled platforms. This study further discusses the practical implications of crowdfunding in startup finance ecosystems.

A Study of Private Equity Rounds of Entrepreneurial Finance in EU: Are Buyout Funds Uninvited Guests for Startup Ecosystems?

This paper studies the difference between startup investments by private equity funds (buyout funds; PE) and venture capital funds (VC). PEs, which have traditionally invested in mature companies, have been increasingly investing in later-stage startups in recent years. Based on Crunchbase’s data on EU startup investments from 2011 to the first half of 2021, we find that: (1) later-stage VC-backed startups and PE-backed startups differ in terms of the industry domain, (2) PE-backed startups tend to have higher revenue when they receive investments, and (3) VC-backed startups are more likely to exit via Initial Public Offering (IPO) and slightly less likely to exit via Mergers and Acquisitions (M&A) than PE-backed startups. These results connect previous studies on VC and PE and deepen our understanding of later-stage startup investment. It also suggests that PE invests differently than VCs and provides new added value to the startup ecosystem. In addition, it adds insights into corporate behavior in new business domain expansion.

Fintech As A Financing Solution For Micro, Small and Medium Enterprises

In 2020, more than 50 new fintech enterprises were formed, these financial businesses competing with the other 140s of startups that had previously been in the Indonesian financial scene. The fintech business in Indonesia has become a prima donna, attracting a lot of attention from financial industry players. Fintech startup investment has sparked a lot of interest, and several startups have even received series A funding this year. Fintech is only getting started, and there are a lot of new products coming out. In the interim, the Service of Cooperatives and Little and Medium Organizations (Service of Little and Medium Endeavors) has sent off 3.81 million miniature, little, and medium undertakings (SMEs) that are now utilizing a web-based stage to advertise their items. This records for around 8% of Indonesia's complete 58.9 million little and medium-sized organizations. The lack of access to capital is a long-standing issue that has hampered the growth of SMEs that do not have access to bank finance. SMEs are unable to create innovations to enhance output due to a lack of financial resources. However, the increasing expansion of fintech financing businesses, such as peer-to-peer lending, has opened up another option for loan funders. Peer-to-peer lending is a type of lending that focuses on the medium and lower market segments.

ДЖЕРЕЛА ФІНАНСУВАННЯ ВЕНЧУРНИХ СТАРТАПІВ В УМОВАХ COVID-19

Експертні дослідження свідчать, що ускладнення епідеміологічної ситуації у світі, посилення наслідків кризи і карантинних обмежень призводять до появи низки додаткових проблем для бізнесу. Зокрема, найбільш вразливими до проявів пандемії виявилися венчурні стартапи, адже криза COVID-19 заклала основу для зниження купівельної спроможності споживачів, посилення труднощів у частині постачання сировини і ресурсів через карантинні обмеження. Незважаючи на розширення можливостей венчурного бізнесу в Україні, фінансова підтримка венчурних стартапів усе ще залишається досить новим напрямом. Окремі аналітичні дослідження підтверджують збільшення інвестицій у розвиток венчурних стартапів. У структурі джерел фінансування вітчизняних стартапів експерти Aventures Capital відзначають посилення ролі венчурних фондів. Зокрема, у вітчизняній екосистемі з’явилася низка нових фондів, які зайняли позиції найбільш активних інвесторів, а саме Adventure Labs, Pragmatech Ventures, Bee Ventures. У свою чергу, як в Україні, так і у світі в цілому зростає потреба в залученні фінансових ресурсів для підтримки венчурних стартапів з використанням широкого спектра джерел в умовах посилення коронакризи. Обґрунтовано джерела фінансування венчурних стартапів з урахуванням негативних наслідків кризи COVID-19. Оцінено тенденції фінансування венчурних стартапів у країнах ОЕСР, що дозволило дійти висновку стосовно збереження доцільності їх фінансування під час коронакризи. Наведено характеристики найбільших інвестицій у венчурні стартапи в Україні у 2020 р. Обґрунтовано ключові характеристики і переваги бутстрепінгу для розвитку венчурних стартапів з огляду на можливі ризики такої форми підтримки стартапів в умовах кризи COVID-19. Оцінено потенціал і ризики венчурного і грантового фінансування в умовах коронакризи. Досліджено потенціал і ризики залучення ресурсів на краудфандингових платформах з метою підтримки венчурних стартапів.

Analysis of Youth’s Willingness to Exploit Agribusiness Opportunities in Nigeria with Entrepreneurship as a Moderating Variable

Despite various initiatives and investments in youth entrepreneurship and start-ups, youth participation in agribusiness has not significantly increased. Therefore, this study analyzed the perceived effects of entrepreneurial traits on youth’s willingness to exploit agribusiness opportunities in Nigeria. A total of 3600 respondents were randomly selected across Nigeria using an online well-structured questionnaire. The data were analyzed using a binomial logistic regression among other tools. The study found that, although only 17% of the respondents were exploiting agribusiness opportunities as of 2020, about 77% of the respondents were willing to exploit agribusiness opportunities in the next 2 years. The study found that entrepreneurial traits had no significant influence on youth’s willingness to exploit agribusiness opportunities until each of the traits was moderated by an individual’s entrepreneurial intention. The implications of the findings are discussed in the study.

Venture capitalists in miniature? Deregulation and equity crowdfunding in the United States

Financialization proceeds, in part, through increasing popular participation. Does this process ever encounter internal limits? This paper considers a project to popularize angel investing in the United States by deregulating it and bringing it online. Scholars have detailed the devices and processes by which non-professionals have come to participate in public stock markets. In comparison, angel investments in high-risk startups are unusual securities: they are local, illiquid and resist calculation and modelling. As such, this form of investing has classically depended on embodied relationships and was legally restricted to the wealthy. In the recent attempt to ‘democratize’ angel investing, however, equity crowdfunding platforms could not sustain the social attachments and ways of knowing which previously subtended the practice. Through interviews and analysis of platforms’ interfaces, I show that this project to popularize angel investment ultimately reproduced and reinscribed exclusive off-line investment networks without substantially incorporating new participants.

Positive effects of portfolio financing strategy for startups

Based on the startup investment database, we empirically examine the positive effects of a portfolio financing strategy for startups. It is known that some investment banks or venture companies have supplied risky and patient capital to U.S. startups of all financial corporations. They provide differentiated debt financing to startups who already received equity financing and invest more in equity when the startup is younger. Empirical analysis shows that the core risk management is to have a dynamic financing ratio between equity and debt as well as varied equity cost of capital, lending rate and investment horizon based on the age, technology, and financial soundness of a startup. We also find that optimal portfolio financing strategy can help startups raise funds with ease, but also it provides investors with higher expected return on investment, which can facilitate financing for startups and furthermore small and medium enterprises.

Socio-economic impacts of COVID-19 on Ukrainian small businesses and households

Relevance of the research topic. The COVID-19 pandemic has shaken Ukraine's economy and affected all businesses. In addition, it showed how vulnerable both business owners and employees can actually be. And, although quarantine has paralyzed business activity in all parts of the world, for Ukrainian entrepreneurs this test has complicated the already difficult economic situation. A socio-economic assessment of the impact of COVID-19 on businesses and households, led by UNDP and in collaboration with UN Women and the Food and Agriculture Organization of the United Nations, found that 84% of households had reduced incomes and 43% had at least one family member. lost his job. Formulation of the problem. Small business is the driving force of the entire economy. This thesis is confirmed by the practical experience of Ukraine and foreign countries. For the past two years, the economies of the states have been affected by the COVID-19 pandemic, which has exhausted them and forced them to look for new ways to support, rationally and economically use funds. Big business has adapted quickly to the challenges of the crisis, but small businesses are not always able to respond adequately and are the most vulnerable, as small businesses tend to lack the financial reserves to stay afloat and go bankrupt in the wake of another pandemic. Selection of unexplored parts of the general problem. Scientists have not yet sufficiently studied the impact of the COVID-19 pandemic on the development and functioning of small business, so they require more detailed research. Problem setting, research goals. The aim of the article is to study socio-economic problems and develop possible anti-crisis measures to overcome the negative impact of the COVID-19 pandemic on the development of small business and household activities. Research method or methodology. The article uses a set of such methods: generalization, descriptive, abstract-logical and systematization. Presenting main material. Given the destabilization of the economy and limited financial resources caused by the pandemic, it is business entities that do not require large start-up investments that can, with some support, solve Ukraine's crisis economy most quickly and effectively, stimulate competition and promote economic growth. Based on the above, we can say that the development of entrepreneurship is a powerful factor in reforming the economy: creating a socially oriented market mechanism, overcoming the current crisis decline in production and providing conditions for economic growth of the regions. Unfortunately, small business, which for many years was formed as a means of subsistence for entrepreneurs and their families, and remained a "survival business" without being formed into a full-fledged sector of the economy. , construction, etc.) carries the following important economic burdens: is an important part of the country's export activities, along with large corporations is an important component of innovation, cooperates with large enterprises, forming mutually beneficial cooperative structures. to become a decisive factor in improving economic mechanisms, and must work in the interests of all segments of society, contribute to the eradication of poverty. Field of application of results. The results of the study can be used in the study of problems: regional economy, global economy, national economy. Conclusions according to the article. In the conditions of a pandemic and a crisis of the economy, it is the state's assistance to small businesses that can lead to an improvement in the economic situation both in the regions and in the country as a whole. Today, it is with small and medium-sized enterprises that the state hopes for rapid positive structural changes in the economy, overcoming the economic crisis and creating conditions for economic growth. That is why countries with developed economies do their best to promote the development of small business by creating a favorable economic climate for its existence, develop and implement various measures of financial support by the state.

Using equity crowdfunding to build a loyal brand community: The case of Brewdog

This case study provides a critical understanding of the connection between start-up investment and the development of a loyal brand community. Learners develop an appreciation of how engagement in crowdfunding campaigns can lead to the creation of engaged partners. This is explored through applying the Business Model Canvas to the case of BrewDog, a company that has expanded beyond the niche market of craft brewing to become an international brand. The use of crowdfunding has not only enabled Brewdog to raise the capital to finance expansion but also to develop a special relationship with some of their customers, who through investment and engagement can become partners in the product development process.

Winning the opportunity to pitch: Piquing startup investors’ interest by sending the right signals in executive summaries

The first communication an entrepreneur often has with a potential investor is submitting a one-page executive summary for consideration. Subsequently, the potential investor or investment group chooses which venture ideas to further consider by inviting a pitch deck or an actual business pitch. This investment funnel is competitive and, accordingly, anything we as scholars can share with entrepreneurs seeking advice about how to optimize that initial executive summary to increase chances of getting to the pitch would be immensely valuable. Unfortunately, scant research has focused on this opportunity-introduction stage, and there is precious little we can prescribe for entrepreneurs seeking investment. To address this, we developed four executive summaries that varied only in the type of capital mentioned. We found that executive summaries that mentioned human capital more prominently were viewed as more cognitively legitimate and as deserving of a higher opportunity-recognition valuation. Put succinctly, consistent both with our theorized findings from our Open Science Framework preregistered experiment (N = 367) and with our qualitative follow-up study, we found that human capital signals have a greater positive influence on potential investors’ decisions relative to social capital, intellectual capital, and financial capital. We discuss the practical and theoretical implications of this novel insight and include prescriptive recommendations for entrepreneurs.

What Factors Drive Start-Up Investments in India’s Subnational Economies?

India has rapidly evolved into a fast-growing emerging market with one of the largest start-up ecosystems in the world. Despite the rapid strides, the nature of investment distribution of start-ups remain heavily concentrated in specific regions within India, fuelling concerns of regional disparities. In this research note, I empirically explore the determinants of start-up investments in India’s subnational economies, to identify the conditioning variables that possibly drive such investments. JEL Codes: L26, O53, R11, R12