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CAN BUSINESS MODEL COMPONENTS EXPLAIN DIGITAL START-UP SUCCESS? A Qualitative Analysis of the Business Models of Start-ups from the Perspective of German Venture Investors

Author

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  • Nina Schumacher

    (State University, Leuphana University of Lüneburg, Lüneburg, Germany)

Abstract

This study explores the success relevance of business model components of digital start-ups from the perspective of German venture capital (VC) investors. In doing so, the study explains the importance of the business model in general and the importance of a convincing value proposition and a plausible revenue model in particular for the investment decision process of VC investors. The study takes an exploratory three-dimensional research approach that integrates the meso-perspective on the business model, the micro-perspective on the entrepreneurial personality, and the macro-perspective on the entrepreneurial context, thus operating in a very young research field. In contrast to most studies on this topic, this paper shows that the business model is not the key resource for the success of a start-up, while an early concept of a business idea might be. Communication and interaction with VC investors at this early stage can be valuable tools for the continuous development of the initial business idea.

Suggested Citation

  • Nina Schumacher, 2022. "CAN BUSINESS MODEL COMPONENTS EXPLAIN DIGITAL START-UP SUCCESS? A Qualitative Analysis of the Business Models of Start-ups from the Perspective of German Venture Investors," Economic Thought and Practice, Department of Economics and Business, University of Dubrovnik, vol. 31(1), pages 81-98, june.
    • Handle: RePEc:avo:emipdu:v:31:y:2022:i:1:p:81-98
    DOI: 10.17818/EMIP/2022/1.4
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    References listed on IDEAS

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    1. Zoltán J. Ács & László Szerb & Esteban Lafuente & Ainsley Lloyd, 2018. "The Entrepreneurial Ecosystem and Global Prosperity," SpringerBriefs in Economics, in: Global Entrepreneurship and Development Index 2018, chapter 0, pages 11-19, Springer.
    2. Hoppe, Gabriela & Breitner, Michael H., 2003. "Business Models for E-Learning," Hannover Economic Papers (HEP) dp-287, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    3. Bernd W. Wirtz, 2019. "Digital Business Models," Progress in IS, Springer, number 978-3-030-13005-3, June.
    4. Paul Schreyer, 2000. "High-Growth Firms and Employment," OECD Science, Technology and Industry Working Papers 2000/3, OECD Publishing.
    5. Zoltán J. Ács & László Szerb & Esteban Lafuente & Ainsley Lloyd, 2018. "What Can We Do to Improve the Entrepreneurial Ecosystem?," SpringerBriefs in Economics, in: Global Entrepreneurship and Development Index 2018, chapter 0, pages 55-63, Springer.
    6. Zoltán J. Ács & László Szerb & Esteban Lafuente & Ainsley Lloyd, 2018. "The Entrepreneurial Ecosystem," SpringerBriefs in Economics, in: Global Entrepreneurship and Development Index 2018, chapter 0, pages 1-9, Springer.
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    Keywords

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    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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