An empirical study of factors affecting start-up performance and valuation in the Indian context

Abstract

With the increasing global interest in the Indian start-up ecosystem, there is a need to identify factors that affect and can potentially help improve performance of new ventures. We conducted an empirical study on the start-ups participating in the India Innovation Growth Programme (IIGP) to identify and understand the factors that affect performance. These factors were compared across the social and industrial cohorts of start-ups and several trends were identified. Using regression analyses, the relative importance of these factors was also evaluated. From our regression models, we identified ‘a competent team’ and ‘a unique value proposition’ as the most important parameters affecting start-up performance. Hence, we propose that when a competent team finds an innovative solution to a market problem, the business is likely to succeed.