IRS 2020 FINNOV

Startups hold great potential for the economy, but many fail to survive beyond their third or fourth year due to a lack of adequate funding. The FINNOV research project aims to better understand the process of financing startups during the seed stage in order to improve their funding and thereby support their growth, enabling them to become the gazelles of tomorrow—or even the unicorns of the day after tomorrow.

Traditional theories examine the relationship between startup founders and investors solely in financial terms. What sets the FINNOV project apart is its approach to analyzing both the demand for and supply of financing simultaneously, while placing the human element at the center of the analysis through a multidisciplinary team: Caroline Tarillon (entrepreneurship and governance), Ludivine Adla (human resources, top-level theory, which posits that a company’s results reflect the cognitive characteristics of its top executives), Geoffroy Enjolras (classical finance theories, agency theory), Han Yu (financing of innovative companies, interviews with pairs during the qualitative phase), and Elodie Monthé (Savoie Mont-Blanc University, investor behavior in crowdfunding). In addition to this team, two private partners ensure access to the field study: the company Estimeo, which specializes in startup ratings (Caroline Tarillon had previously signed a research contract with them to conduct interviews in Paris), and RainMakers in Grenoble.
 
A qualitative phase was conducted with nine pairs consisting of startup founders and investors (business angels and/or venture capitalists). The results show that shared values between the two members of each pair appear to be the key factor in investment decisions. In their interviews, the startup founders spoke primarily about the person in charge of the investment fund rather than the fund itself.
A quantitative phase was conducted with the assistance of an intern from the IAE’s Master 2 in Marketing program, Lamis Al Shalabi, who was working in behavioral finance. She conducted a literature review, developed the questionnaire, and built the database of Business Angels and Venture Capital firms. The questionnaire will be distributed shortly.