Authors: | Rizomyliotis, Ioannis Kvasova, Olga Salvi, Antonio Giakoumelou, Anastasia |
Issue Date: | 26-May-2023 |
Journal: | International Journal of Entrepreneurial Behaviour and Research |
Keywords: | Business development, Financing, Innovation, Start-ups |
Abstract: | Purpose: Access to financing is a key success factor for start-ups. High failure rates, long payback periodse and asymmetries lead to conservative pricing and valuation discounts. The authors examine financial marketing and contingent factors, as enablers of a “patent premium” by private equity (PE) investors targeting start-ups in their growth and expansion stages. Design/methodology/approach: Drawing from the contingency, innovation and signaling theories, the authors collect patent records for Italian start-ups in which a higher than 30% stake was acquired by PE investors during the period 2014–2020. The authors apply a generalized linear model with a logit link and robust clustered error to test the key relationships and control for endogeneity with a Heckman two-stage selection model. Findings: Findings indicate start-ups’ access to financing is significantly impacted by marketing constructs adopted in the operation. Innovation alone does not suffice to determine a valuation premium, unless contingent on the promotion of its product, the placement -investors targeted-of the equity, brand equity levers of previous ownership and marketing competence backing the deal. Originality/value: The authors provide new insights in the marketing-finance interface, highlighting levers that reassure investors and enable monetizing innovation in start-ups that are still privately held. The authors bridge a gap in literature that has mainly focused on venture capital and innovation financing in the open market, as well as a significant gap regarding the marketing design of private equity placements. |
ISSN: | 1355-2554 |
DOI: | 10.1108/IJEBR-02-2022-0197 |
URI: | https://uniwacris.uniwa.gr/handle/3000/1621 |
Type: | Article |
Department: | Department of Business Administration |
School: | School of Administrative, Economics and Social Sciences |
Affiliation: | University of West Attica (UNIWA) |
Appears in Collections: | Articles / Άρθρα |
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