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Exploring the Intersection of Early-Stage Deep Tech Hardware Startups in Europe and Venture Capital Investments

Schmitz, Noah Lukas LU and Karpenko, Reinhardt LU (2024) ENTN19 20241
Department of Business Administration
Abstract
This thesis explores the investment criteria applied by venture capitalists (VCs) for early-stage Deep Tech hardware startups in Europe, focusing on how these criteria and their characteristics vary across Pre-Seed, Seed, and Series A funding rounds. Drawing from a dataset of 102 relevant investment rounds spanning from 2022 to 2024, the study employs quantitative methods to analyse funding dynamics, post-money valuations, equity distribution, public funding trends, industry classifications, and technological maturity milestones.

Findings reveal that VCs prioritise technological innovation and founder expertise at the Pre-Seed stage, market validation and early customer traction at the Seed stage, and scalability and proven market fit... (More)
This thesis explores the investment criteria applied by venture capitalists (VCs) for early-stage Deep Tech hardware startups in Europe, focusing on how these criteria and their characteristics vary across Pre-Seed, Seed, and Series A funding rounds. Drawing from a dataset of 102 relevant investment rounds spanning from 2022 to 2024, the study employs quantitative methods to analyse funding dynamics, post-money valuations, equity distribution, public funding trends, industry classifications, and technological maturity milestones.

Findings reveal that VCs prioritise technological innovation and founder expertise at the Pre-Seed stage, market validation and early customer traction at the Seed stage, and scalability and proven market fit at the Series A stage. The research underscores the significance of strategic partnerships and public funding in enhancing investor confidence.

This study builds on Hall and Hofer’s (1993) framework, and provides a detailed analysis of VC investment behaviour in the Deep Tech sector. It highlights the higher equity stakes and larger round sizes required for Deep Tech hardware startups, compared to other sectors, among other insights. The thesis contributes to existing literature by offering practical insights for both investors and founders, helping to deal with the complex funding landscape of the Deep Tech hardware sector. (Less)
Please use this url to cite or link to this publication:
author
Schmitz, Noah Lukas LU and Karpenko, Reinhardt LU
supervisor
organization
course
ENTN19 20241
year
type
H1 - Master's Degree (One Year)
subject
keywords
Entrepreneurship, Venture Capital, Deep Tech, Hardware Startups, Pre-Seed Funding, Seed Funding, Series A Funding, Investment Criteria
language
English
id
9162901
date added to LUP
2024-08-20 08:59:23
date last changed
2024-08-20 08:59:23
@misc{9162901,
  abstract     = {{This thesis explores the investment criteria applied by venture capitalists (VCs) for early-stage Deep Tech hardware startups in Europe, focusing on how these criteria and their characteristics vary across Pre-Seed, Seed, and Series A funding rounds. Drawing from a dataset of 102 relevant investment rounds spanning from 2022 to 2024, the study employs quantitative methods to analyse funding dynamics, post-money valuations, equity distribution, public funding trends, industry classifications, and technological maturity milestones.

Findings reveal that VCs prioritise technological innovation and founder expertise at the Pre-Seed stage, market validation and early customer traction at the Seed stage, and scalability and proven market fit at the Series A stage. The research underscores the significance of strategic partnerships and public funding in enhancing investor confidence.

This study builds on Hall and Hofer’s (1993) framework, and provides a detailed analysis of VC investment behaviour in the Deep Tech sector. It highlights the higher equity stakes and larger round sizes required for Deep Tech hardware startups, compared to other sectors, among other insights. The thesis contributes to existing literature by offering practical insights for both investors and founders, helping to deal with the complex funding landscape of the Deep Tech hardware sector.}},
  author       = {{Schmitz, Noah Lukas and Karpenko, Reinhardt}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Exploring the Intersection of Early-Stage Deep Tech Hardware Startups in Europe and Venture Capital Investments}},
  year         = {{2024}},
}