Determinants of Venture Capital Investments in Tech Start-UPS

Cristian Negrutiu
JEL codes: 
G23 - Non-bank Financial Institutions; Financial Instruments; Institutional Investors, G28 - Government Policy and Regulation, M13 - New Firms; Startups, O31 - Innovation and Invention: Processes and Incentives.
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.
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