What drives the valuation of entrepreneurial ventures? A map to navigate the literature and research directions

Massimo G. Colombo (), Benedetta Montanaro () and Silvio Vismara ()
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Massimo G. Colombo: Politecnico Di Milano
Benedetta Montanaro: Politecnico Di Milano
Silvio Vismara: University of Bergamo

Small Business Economics, 2023, vol. 61, issue 1, No 4, 59-84

Abstract: Abstract The drivers of the valuations of entrepreneurial ventures are an important issue in entrepreneurial finance, but related research is fragmented. The theoretical perspectives and the drivers highlighted by previous studies differ based on the financial milestones during a venture’s lifecycle in which the valuation is performed (e.g., venture capital investments, initial public offerings, acquisitions). The introduction of new digital financing channels (e.g., crowdfunding, initial coin offerings) that allow retail investors to directly invest in entrepreneurial ventures challenge our understanding of the drivers of valuation. This change has also increased the diversity in the sequence of financial milestones that ventures go through, with important implications for valuation. We conduct a systematic literature review and develop a map highlighting how and why the drivers of venture valuations and their underlying theoretical lenses vary across the different milestones that ventures go through. The map allows us to outline new promising avenues for future research.

Keywords: Valuation; Entrepreneurial finance; Crowdfunding; ICOs; Business angels; VCs; IPOs; M&As (search for similar items in EconPapers)
JEL-codes: G12 G13 G23 G24 G34 L26 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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DOI: 10.1007/s11187-022-00688-5

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