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Determinants of Venture Capital Investments in Tech Start-UPS

Author

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  • Cristian Negrutiu

Abstract

Tech start-ups and, especially, unicorns have become a hot topic of today business world. Significant amounts of money have been invested in this sector by venture capital funds in the hope of a good return. However, the criteria and determinants of these investments are fuzzy, and the author has identified a gap in the scientific literature. Therefore, the objective of the present paper is to discover the determinants of venture capital investments in tech start-ups. Based on a secondary dataset, a multifactorial regression model is proposed that explains the appetence for investment of venture capital funds into tech start-ups. The model shows that the amount of funding in start-ups will increase as the number of unicorns and exits strengthens.

Suggested Citation

  • Cristian Negrutiu, 2022. "Determinants of Venture Capital Investments in Tech Start-UPS," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 25(84), pages 31-40, December,.
    • Handle: RePEc:rej:journl:v:25:y:2022:i:84:p:31-40
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    References listed on IDEAS

    as
    1. Keith C. Brown & Kenneth W. Wiles, 2015. "In Search of Unicorns: Private IPOs and the Changing Markets for Private Equity Investments and Corporate Control," Journal of Applied Corporate Finance, Morgan Stanley, vol. 27(3), pages 34-48, September.
    2. David B. Audretsch, 2021. "Have we oversold the Silicon Valley model of entrepreneurship?," Small Business Economics, Springer, vol. 56(2), pages 849-856, February.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    entrepreneurship; venture capital; tech start-ups; unicorns; Threshold regression model;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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