Venture Capital Funding and Early-Stage Startup Performance

Yaoxuan Wang

doi:10.54254/2754-1169/46/20230333

Research Article

Open access

Published on 1 December 2023

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Wang,Y. (2023). Venture Capital Funding and Early-Stage Startup Performance. Advances in Economics, Management and Political Sciences,46,153-158.

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Venture Capital Funding and Early-Stage Startup Performance

Yaoxuan Wang *^,1,

¹ The State University of New Jersey

* Author to whom correspondence should be addressed.

https://doi.org/10.54254/2754-1169/46/20230333

Abstract

This paper explores the significance of team composition, market valuation, and deal structure in venture capital (VC) investments. The research highlights that the success of a startup is heavily influenced by the skill, knowledge, and dedication of the founding team. Additionally, market valuation plays a crucial role in determining the expected return on investment for venture capitalists. Various valuation methods, such as the discounted cash flow model and the Berkus method, are discussed to aid in the assessment of a startup's future prospects. Furthermore, the paper emphasizes the importance of a solid transaction structure, which includes equity, voting rights, and clear responsibilities for both parties involved. A strong transaction structure aligns the objectives of venture capitalists and startups, encourages rapid development, and reduces conflicts. Case studies of successful VC investments, such as Airbnb and Uber, are presented to illustrate how team composition, market valuation, and deal structure contribute to their growth and success. Overall, this research provides valuable insights into the factors that influence VC investments and their implications for startup success, investment performance, and economic development.

Keywords

team composition, valuation techniques, deal structure

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References

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Cite this article

Wang,Y. (2023). Venture Capital Funding and Early-Stage Startup Performance. Advances in Economics, Management and Political Sciences,46,153-158.

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The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

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About volume

Volume title: Proceedings of the 2nd International Conference on Financial Technology and Business Analysis

Conference website: https://www.icftba.org/

ISBN：978-1-83558-139-1(Print) / 978-1-83558-140-7(Online)

Conference date: 8 November 2023

Editor：Javier Cifuentes-Faura

Series: Advances in Economics, Management and Political Sciences

Volume number: Vol.46

ISSN：2754-1169(Print) / 2754-1177(Online)

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