Influence of capital raising and technology on success of start-ups in Asean market

Abstract

In the context of flourishing development of ASEAN countries, the investment capital and the development of Start-ups are considered as the new lever source of the economy, especially start-ups in the field of technology and innovation. This study aims to analyze the impact of technology factors and type of investment funds on the success of a Start-ups in the ASEAN region which has successful exited via M&A or IPO, using a panel dataset collected from website www.Crunchbase.com – considered as the world's largest source of information on start-ups. Based on the proposed research model, the study performs regression analysis including control variables on company capacity, macro factors and robust test to determine the robustness of the results. At the same time, the interaction factor between technology and the type of investment fund is added as an important part of detecting differences in terms of idiosyncrasies. The research indicates solid evidence for three important results including (1) Investment funds have a positive impact on the successful exit of a start-up; (2) Technology is a factor that positively affects the success as well as increases the intrinsic value of the business; (3) Technological factors and type of investment fund also have positive effects on Start-ups' M&A or IPO goals. From that result, the study has given recommendation on the views that need to be considered about technology capabilities and investment objectives in the process of fundraising of Start-ups and investment decisions by different investment funds, hence encouraging the focus on tech-edge innovation in doing business and empowering the future development of start-up ecosystem.