Determinant of Startups’ Fund-raising Value: Entrepreneur and Firm Characteristic

Equity fund raising is one of the top key challenge faced by startup entrepreneur. In this stage, “how to determine the firm's value” becomes a big question. Traditional approach relies valuation process on financial information in which it is inadequate in startup context. Current studies that rely valuation on non-financial information had been perform mostly in developed countries. This study aims to identify factor effecting fundraising value by applying empirical study using nonfinancial information data from startup in ASEAN. We uniquely hand-collected the data from 211 transactions in 6 ASEAN countries. 14 parameters had been preliminary identified as factor effecting fundraising value from literature review. Factor analysis reduces parameter from 14 to 7 factors and linear regression result suggested that Experience (EXP) and Education (EDU) of entrepreneur characteristic, Size (SIZE) and Team completeness (TEAM) of organization characteristic are positively impact fund raising value. To maximize fund raising value, entrepreneur should have high experience and education whereas startup company should have substantial size with full function of management in the executive team.