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Enter the Shark Tank: The Impact of Business Models on Early Stage Financing

In: Innovation Through Information Systems

Author

Listed:
  • Timo Phillip Böttcher

    (Technical University of Munich)

  • Valentin Bootz

    (Technical University of Munich)

  • Tetiana Zubko

    (Technical University of Munich)

  • Jörg Weking

    (Technical University of Munich)

  • Markus Böhm

    (Technical University of Munich)

  • Helmut Krcmar

    (Technical University of Munich)

Abstract

Investments are the necessary fuel for startup development. However, new ventures face difficulties in obtaining financial investments. The investors aim to invest in startups with high success chances and quick return on investment. The business model (BM) of a startup was proven to be a determinant of its success. However, there is a lack of research on the influence of the BM on the amount of received seed funding. This study analyzes the BMs of 72 startups and the amount of received seed investment. We applied Pearson's product-moment correlation tests to calculate the correlation between these variables. Our research shows a correlation between the BM and the amount of received seed investment. We identify the patterns Two-Sided Market, Layer Player, and Freemium to have a significant positive effect on the investment sum. This research guides entrepreneurs in BM design and contributes to the discussion of success factors for startup success.

Suggested Citation

  • Timo Phillip Böttcher & Valentin Bootz & Tetiana Zubko & Jörg Weking & Markus Böhm & Helmut Krcmar, 2021. "Enter the Shark Tank: The Impact of Business Models on Early Stage Financing," Lecture Notes in Information Systems and Organization, in: Frederik Ahlemann & Reinhard Schütte & Stefan Stieglitz (ed.), Innovation Through Information Systems, pages 275-289, Springer.
    • Handle: RePEc:spr:lnichp:978-3-030-86800-0_20
    DOI: 10.1007/978-3-030-86800-0_20
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