Innovativeness of a Start-Up as a Criterion in Venture Capital Decision Making

Kredit und Kapital, Vol. 44, No, 4, pp. 509-541

31 Pages Posted: 25 Apr 2009 Last revised: 29 Sep 2013

See all articles by Florian Jell

Florian Jell

Technische Universität München (TUM)

Jorn H. Block

University of Trier - Faculty of Management; Erasmus University Rotterdam (EUR) - Institute of Management (ERIM)

Joachim Henkel

TUM School of Management - Technische Universität München (TUM)

Date Written: February 9, 2010

Abstract

Innovativeness of a start-up is regarded as a prerequisite to acquire venture capital. However, it is neither obvious how to conceptualize nor how to measure it. Even though start-up innovativeness is of high practical relevance, no empirical research on the topic exists. This article is a first contribution to address this gap. We develop a conceptual model of the various dimensions of innovativeness of a start-up and verify it in a qualitative empirical study. Based on 19 in-depth interviews with venture capital decision makers we derive statements regarding the role of a start-up’s innovativeness in the venture capital funding decision. We find, among other things, that VCs evaluate the various dimensions of innovativeness rather differently, and that a higher level of innovativeness does not necessarily lead to a higher probability of securing venture capital. These results can serve to derive testable hypotheses. We conclude by deriving implications for research and practice. Paper is in German.

Note: Downloadable document is in German.

Keywords: Venture Capital, Innovativeness, Innovative Business Model, Risk Evaluation

JEL Classification: G24, L26, O30

Suggested Citation

Jell, Florian and Block, Jorn Hendrich and Henkel, Joachim, Innovativeness of a Start-Up as a Criterion in Venture Capital Decision Making (February 9, 2010). Kredit und Kapital, Vol. 44, No, 4, pp. 509-541, Available at SSRN: https://ssrn.com/abstract=1394149

Florian Jell (Contact Author)

Technische Universität München (TUM) ( email )

Arcisstrasse 21
Munich, DE 80333
Germany

Jorn Hendrich Block

University of Trier - Faculty of Management ( email )

D-54296
Germany

Erasmus University Rotterdam (EUR) - Institute of Management (ERIM) ( email )

Burgemeester Oudlaan 50
3000 DR Rotterdam, Zuid-Holland 3062PA
Netherlands

Joachim Henkel

TUM School of Management - Technische Universität München (TUM) ( email )

Arcisstr. 21
Munich, D-80333
Germany

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