Methodology for a Startup Lifecycle-dependent Approach of Financing for Investors and Deep Tech Startups

Startups are under constant pressure to raise capital and resources to achieve their development objectives. Deep technology (DT) startups in particular are often associated with uncertainties for investors and pose special requirements for financing due to, for example, long development cycles, the need for extensive expert knowledge or markets that have yet to be developed. A major problem in raising capital for startups is the information asymmetries and the lack of understanding between them and investors. These challenges often result in a lack of the necessary resource support for promising ideas through equity financing with investors. Consequently, the full market potential cannot be realized, or the startup fails as a consequence of missing capital. Against this background, this paper aims to conceptualize a methodology to provide startups with lifecycle-dependent recommendations for their financial marketing towards investors. To do so, existing approaches in literature are discussed and analyzed regarding their deficits. Based on these findings, a model is conceptualized combining both the – lifecycle-dependent perspectives of startups and different investor types to derive optimal investment scenarios for both parties.