Startup Success Factors in the Capital Attraction Stage: Founders’ Perspective

Abstract

Only a small percentage of startups attract capital from venture capital investors. To determine the factors which owners of startups consider the most important for attracting seed venture investments, the founders of 40 startups in Latvia and Russia were questioned. The researchers compared organizational and financial factors’ importance for two groups of entrepreneurs: those who succeeded and those who failed in attracting funding. The results of the study indicate certain differences between the viewpoints of founders and investors regarding success factors. Based on the factor and regression analysis, the authors developed a model to forecast success in capital attraction.

Keywords: seed capital attraction, startup founders, startup fundraising success factors, venture capital investors

JEL Classification: G24, G32, D81