Add Thesis

What is a successful Start-Up?

Exploring venture capitals’ impact on entrepreneurs’ view of success

Written by Lukas Lindell, Erik Englund

Paper category

Master Thesis


Business Administration>Entrepreneurship




Master Thesis: Changes in entrepreneurs’ perceptions of success Most entrepreneurs fail to reflect on their perceptions of success and how venture capital investment affects how they define success. After a period of thinking and reflection, most of them realized that after making venture investments in their respective companies, their perceptions of success had undergone a certain change. Although most of the entrepreneurs we interviewed said that after venture capitalists joined their companies, their perceptions of success have changed, but they claim to still maintain most of their original vision of success, but in most cases, The degree is different. An interviewee explained that his view of success still existed after the investment, but it faded slightly and became a mixture of his original definition and the investor's financial view of success. "I think I now think that the success of my company is a combination of my previous ideas and what investors want." In the following subsections, we change from entrepreneurs’ perceptions of success before and after investment and between them The aspect presented our findings. The pre-investment concept of success is as implied in the literature (Kiviluoto, 2013; autio, 2007). Entrepreneurs’ perceptions of success may vary greatly, including various factors, such as creating new things, contributing to society or individuals Achievements and more. Almost all interviewees had a non-financial view of success when they first started their business. The answers presented by the interviewees revealed a variety of preliminary views on success. Most interviewees also gave different reasons and backgrounds for each question. In this section, we show the overall view of entrepreneurs on risk success before venture capitalists enter the company. Our survey results indicate that our main categories personal and interpersonal aspects were initially much more important to our respondents than financial aspects, see Figure 1 below. Please note that the numbers provided in the survey results section are only intended to be based on our response. The findings of entrepreneurs’ pre-investment view of success are consistent with most previous studies (for example, Fisher et al., 2014 and Black et al., 2010). They believe that entrepreneurs’ perceptions of success are significantly different from those of venture capitalists. Is to pay more attention to finances. Personal perceptions of success are part of all of our interviewees’ initial perceptions of success, and many people say that these are also the most important. These also seem to be closely related to the potential motivation of entrepreneurs to start a business. According to our interviewees, one of the most frequently mentioned aspects is the desire to create something that other people like and see its value. Views on success after investment Our interviews show that entrepreneurs’ views on success after venture capital are a mixture of personal, interpersonal and financial aspects. Entrepreneurs' post-investment success outlook is mainly influenced by financial aspects, which is contrary to their investment outlook and most previous studies (for example, Fisher et al, 2014; Black et al., 2010). Almost all of our interviewees have undergone a conceptual change. Success is getting closer and closer to the classic financial definition of success by venture capitalists, focusing on growth and value-added activities. However, the personal and interpersonal aspects are still important. Our analysis of entrepreneur response clearly shows this change, as shown in Figure 2 below. In general, we can see a shift in the view of success, which shows that interpersonal factors have become less important, and financial factors have become entrepreneurial An important part of the concept of success after investment. The personal category is the category with the least changes, but some differences were also found from the interviews. For example, the self-employment subcategory becomes less important after investment, while the creation subcategory shifts its definition to more creation of the company itself, rather than creation of products or services. The importance of the personal view of success has only declined slightly for entrepreneurs, and it is still important after investment, as shown in Figure 3. However, entrepreneurs report that with the participation of venture capital, they have undergone some changes. Most interviewees said that creation after investment is as important as before investment, but for them, the meaning of creation has changed. For our interviewees, creation after investment is more about creating a good company, rather than creating a good product or service as it did before investment. This makes this category more financial than just individuals, just like before investing. Self-employment is still important, but it has become less important. We believe that, as an entrepreneur said, this is related to the reason why entrepreneurs feel successful simply because they have obtained funds. In addition, investment has given many entrepreneurs the opportunity to start receiving salaries from the company, so they have achieved self-employment to some extent. Regarding personal achievements, we haven't seen any changes after venture capital. All the interviewees who thought it was important before investing still held this view after venture capital intervention. The concept of interpersonal success is still part of the concept of success, but in most cases, it is different to the level before venture capital. Research subjects still report opinions such as contributing to society, creating a good working environment, and risk recognition. Read Less