Not Just About the Money: How Investors Evaluate Startup Risks
Loading...
Date
Journal Title
Journal ISSN
Volume Title
Publisher
Technická Univerzita v Liberci
Technical university of Liberec, Czech Republic
Technical university of Liberec, Czech Republic
Abstract
Startups are exciting but risky business. Today´s investors look at more than just financial numbers when deciding where to put their money. This paper explores how both financial and non-financial risks affect and how startups are valued. The goal is to understand what kinds of risks matter most to investors and how these risks each other interact. To answer this, we reviewed ten peer-reviewed articles published between 2018 and 2024. These studies focus on topics such as cash flow, capital structure, ESG performance, team dynamics, and innovation. The findings show that investors are used to take a broad view. Weak cash flow can limit innovation, while issues with ESG or team quality can reduce a startup’s chances of getting more funding and gaining real business progress. The paper also highlights how risk is seen differently in various parts of Europe, depending on local funding patterns. Startups that manage both types of risk effectively tend to grow faster and attract more stable investments. Financial indicators still matter, but soft factors like adaptability and leadership play a growing role in investor decisions as well. This paper suggests that founders should treat risk management as a strategic tool, not just a financial safeguard. By combining both perspectives, investors and entrepreneurs can mutually make more informed, long-term decisions about the future of a startup.
Description
Subject(s)
Startup Valuation, Financial and Non-Financial Risk, ESG, R&D
Citation
ISSN
ISBN
978-80-7494-747-6