Determinants of venture capital success in Spanish startups: a comparative analysis

Purpose Funding is decisive to drive the development of early-stage startups. However, access to adequate financing is scarce. Independent and corporate venture capitalists, business angels, and family offices can provide not only financial resources but also strategic knowledge to boost entrepreneurs' fundraising capacity. Minimising the risks involved with financing startups is key for these professional investors. This study identifies the factors that influence the investment decisions of large-portfolio investors (i.e. professional investors) and offers them tools for risk mitigation. Design/methodology/approach Data were gathered from the main business angel association for a large European market. Qualitative comparative analysis was performed using fsQCA 4.1 software. Findings Large-portfolio investors primarily value three aspects when funding a startup: (1) the environmental sustainability of the startup; (2) strong startup governance (including a management control system), continuous financial reporting and control, advice seeking (especially when the startup team lacks business experience), and talent management; and (3) the stage of startup investment (seed, pre-seed, or early-stage). Originality/value Funding startups is risky, so investors look for quantifiable features of startups to underpin their investment decisions. These features are continuously changing and adapting to the economic, social, and environmental context. Therefore, this study also considers startups' environmental sustainability and talent management to discover to what extent investors consider these factors in their investment decisions.