The role of venture capital in supporting and developing innovative startups at early stages

Abstract

This article examines the critical role of venture capital in supporting and developing innovative startups at the early stages of their life cycle. In recent decades, venture capital has become an integral part of the startup ecosystem, contributing to the growth and sustainability of young innovative enterprises. The research is based on an analysis of existing literature, as well as empirical data obtained through surveys and interviews with venture capitalists and startup founders. Additionally, a comparative analysis of successful and unsuccessful startups is used to identify key factors influencing their development. The study showed that venture capitalists not only provide funding but also offer strategic guidance, management support, access to extensive business networks, and assistance in building effective business models. In particular, at the early stages of startup development, the availability of capital for research, development, and implementation of innovative solutions is crucial. It was found that startups supported by venture capitalists have a higher chance of success compared to those that do not receive such support. Comparing various scenarios of startup support allows us to assert that venture capital is one of the most important factors contributing to their successful growth and development. However, the article also discusses the risks and limitations faced by startups and venture capitalists, including a high level of uncertainty and the need to find a balance between innovation and commercial viability. Venture capital plays a vital role in supporting and developing innovative startups at the early stages of their existence. Strategic management, financial support, and access to business networks are key elements contributing to the successful growth and sustainability of young enterprises. Further research is required to gain a deeper understanding of the interaction mechanisms between startups and venture capitalists.