Venture Capital and Startup Growth: Balancing Short-Term Gains with Long-Term Sustainability

Venture capital (VC) financing plays a crucial role in enabling startups to scale, innovate, and survive in competitive markets. This paper examines how VC funding impacts both the short term growth of startups (e.g. revenues, employee count, market reach) and their long term sustainability (e.g. survival rates, adaptability, enduring performance). By reviewing existing literature, synthesizing empirical findings, and analysing moderating and mediating factors like absorptive capacity, investor reputation, industry type, and regulatory environment, this paper proposes a framework that identifies when and how VC financing is most effective. The findings suggest that while VC financing generally enhances growth, its impact on long term sustainability is conditional on startup capabilities, timing of investment, and external ecosystem conditions. Policy implications and directions for future research are discussed.